Systems Thinking Approach to Develop Smallholder Beef Farming in Rural Java, Indonesia Novie Andri Setianto Diploma in Animal Science Master of Science in Rural Development A thesis submitted for the degree of Doctor of Philosophy at The University of Queensland in 2014 School of Agriculture and Food Science
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Systems Thinking Approach to Develop Smallholder Beef
Farming in Rural Java, Indonesia
Novie Andri Setianto
Diploma in Animal Science
Master of Science in Rural Development
A thesis submitted for the degree of Doctor of Philosophy at
The University of Queensland in 2014
School of Agriculture and Food Science
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Abstract
Improving smallholder performance remains a seemingly intractable central issue for beef farming development in Indonesia. Studying a complex system such as beef farming requires a systems thinking approach. In the body of systems thinking, System Dynamics (SD) is considered to be a powerful methodology for taming the complexity of a system. However, SD has been criticized as being insensitive to the multiple interests and power structures likely to occur in a smallholder system. This thesis reports on the possibility of combining Soft Systems Methodology (SSM) and Critical Systems Heuristics (CSH) to overcome that limitation.
The objective of this research was to devise an approach that optimises the participation of farmers and other stakeholders in: (1) understanding the overall systems well enough to identify the problematic situations - the situations which participants considered as uncomfortable; and (2) formulate the most feasible strategies for mitigating the problematic situation.
A series of interviews and workshops involving two farmer groups and other stakeholders in the smallholder beef farming system was undertaken in two separate field studies in Central Java, Indonesia. The five steps of SD’s methodology were adopted with an enhancement at the problem structuring process where the CATWOE analysis of SSM and the 12 questions of CSH complement the SD.
As a result, a four dimensional representation of the problematic situation of smallholder beef farming was generated. The dimensions involve; motivation, control, knowledge, and legitimacy. From this a Causal Loop Diagram (CLD) was assembled. This CLD has a total of nine loops, four reinforcing and five balancing, and seven archetypes: two limit to growth archetypes, three shifting the burden, and one each of archetypes of success to successful and fixes that fail, which together defined the systems’ behaviour. A total of seven leverages were able to be identified: increase forage availability, control of the trading of cattle, improve farming productivity to generate income, improve breeder cow performance, strengthen waste management skills, balance the breeding and fattening ratio on farm, and focus on increasing the cattle population.
After refinement, and in consultation with respondent farmers, this CLD was translated into a quantitative dynamic model to allow simulation of these leverage points. The result suggests the following strategies: forage availability is not an issue as the current cattle population is less than the carrying capacity, provide education about herd replacement strategies to maintain the desired sales rate at a sustainable level, improve the feed, reduce the risk of overpriced purchasing and under-priced selling, provide education about farm planning and budgeting, educate farmers on animal assessment i.e. to select quality breeding cows, manure composting, and buying cattle using non-grant schemes.
Although increasing the complexity of the methodology, the inclusion of CSH and SSM in the research protocol provided depth and richness to the findings through the ability of the models to embrace the opinions of the farmers who are often reluctant to express their opinion. Thus, for the stakeholders, the described models provide a better understanding
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of the system than can be provided by SD alone and thereby provides the potential for facilitating development of more effective interventions. Further, the study produces a rigorous dynamic model which can be used to simulate intervention strategies. Three key statements were produced as recommendations for the development of smallholder beef farming in Rural Java. This includes: the importance of improving the local breeding cows’ reproductive performance; the necessity to consider farmers’ opinions in policy making; and the need to re-think the design of government programs to support smallholders.
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Declaration by author
This thesis is composed of my original work, and contains no material previously published
or written by another person except where due reference has been made in the text. I
have clearly stated the contribution by others to jointly-authored works that I have included
in my thesis.
I have clearly stated the contribution of others to my thesis as a whole, including statistical
assistance, survey design, data analysis, significant technical procedures, professional
editorial advice, and any other original research work used or reported in my thesis. The
content of my thesis is the result of work I have carried out since the commencement of
my research higher degree candidature and does not include a substantial part of work
that has been submitted to qualify for the award of any other degree or diploma in any
university or other tertiary institution. I have clearly stated which parts of my thesis, if any,
have been submitted to qualify for another award.
I acknowledge that an electronic copy of my thesis must be lodged with the University
Library and, subject to the General Award Rules of The University of Queensland,
immediately made available for research and study in accordance with the Copyright Act
1968.
I acknowledge that copyright of all material contained in my thesis resides with the
copyright holder(s) of that material. Where appropriate I have obtained copyright
permission from the copyright holder to reproduce material in this thesis.
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Publications during candidature
Peer reviewed papers
Setianto, N. A, Cameron, D. and Gaughan, J. B., 2014, Structuring the problematic
situation of smallholder beef farming in Central Java, Indonesia: using systems
thinking as an entry point to taming complexity, International Journal of Agricultural
Management, vol. 3, no. 3, pp: 164 – 174
Setianto, N. A., Cameron, D. and Gaughan, J. B., 2014, Identifying Archetypes of an
Enhanced System Dynamics Causal Loop Diagram in Pursuit of Strategies to
Improve Smallholder Beef Farming in Java, Indonesia. Systems Research and
2006); System Dynamics (SD) (Forrester 1968, 1994, 2007); and Critical System
Heuristics (CSH) (Ulrich 1983; Ulrich & Reynolds 2010). SSM has strengths in exploring
stakeholders’ perspectives and structuring the problem of the system (Hardman & Paucar-
Caceres 2011); SD provides a tool to visualize systemic linkages (Maani & Cavana 2007)
and produces a rigorous dynamic model (Lane & Oliva 1998; Jackson 2002; Rodriguez-
Ulloa & Paucar-Caceres 2005); whereas CSH is sensitive to societal power structures
(Jackson 2003). An attempt to combine SD and SSM has been made by Rodrigues-Ulloa
et al. who introduced “Soft System Dynamic Methodology” (SSDM) (Rodriguez-Ulloa &
Paucar-Caceres 2005; Rodríguez-Ulloa et al. 2011)). My research will try to incorporate
SSM and CSH into the SD framework in an effort to take account of societal power
structures which need to be comprehended when dealing with the human experience
(Haller 2001). Further discussion of each methodology and their combination is to be
found in Chapter 3.
1.6 Chapter Summary
In Indonesia, beef farming is dominated by smallholders. Thus, the improvement of
smallholder beef farming remains the key to development of the Indonesian beef industry.
Despite much research on the industry, and numerous programs aimed at developing the
beef industry in Indonesia, the nation still depends on beef products and live cattle imports,
which indicates there must be some problematic situations which constrain the
development of smallholder beef farming.
Smallholder beef farming is part of a complex system, and accordingly requires an
approach capable of exploring this complexity. System thinking offers methods to
describe the complexity of the system, and provide visualization of the linkages among
elements in the system, which can be further incorporated into model of beef farming
development in Indonesia. Appropriate methodology is required to properly study the
smallholder. This study offers the combination of Systems Dynamics, Soft Systems
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Methodology, and Critical Systems Heuristics in an effort to explore and describe the
complexity of the beef farming, identify the problematic situations, and propose
intervention strategies.
Chapter 2 provides further discussion of the systems in which the beef farming operates.
Chapter 3 provides an explanation of system thinking approaches, including the
development of the conceptual and methodological instruments which are used in this
study. Then, Chapter 4 describes and discusses the methods employed to undertake this
research. The initial findings of the field study are presented in Chapter 5, which
discusses the current situation of the farming. Next, Chapter 6 attempts to structure the
problematic situation and identify the possible causal relationships linked to the
problematic situation. These linkages are presented in a series of causal loop diagrams
representing different aspects of the system, which are then assembled into a single
system CLD. This is translated into dynamic stock and flow model in Chapter 7. This
model was used to identify key leverage points and simulate several recommended
intervention strategies. Finally, Chapter 8 provides a general discussion and conclusion to
the study.
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Chapter 2. Agricultural Systems
As in many other regions in Asia, most smallholder farmers in Java are carrying out mixed
farming combining crop and livestock production. Therefore, the literature review will be
divided into two chapters, Chapter 2 and 3. Chapter 2 will be focused on the review of
background theory of agricultural systems and beef farming, while Chapter 3 will focus
more specifically the approach nominated in this research, which is the systems thinking
approach.
2.1 Agricultural System
Agriculture can be defined as the cultivation of plants, animals, and ecosystems to provide
food, fibre, and fuel for human ends (Brad 2007; Oxford Dictionaries Online 2011; Reed
2011). Agricultural activity is not only about producing food and fibre but also involves the
related ecosystem services, such as biodiversity, as well as the way of life of the farming
community (Rickert 2004). McConnell and Dillon (1997) define an “Agricultural System” as
follows:
… an assemblage of components which are united by some form of interaction
and interdependence and which operate within a prescribed boundary to
achieve a specified agricultural objective on behalf of the beneficiaries of the
system…
Within the agricultural system definition, two main aspects emerge; components and form
of interaction and interdependence (McConnell & Dillon 1997). The components of
agricultural systems might include labour, markets, finances, natural resources, genetic
stock, nutrition, equipment, and hazards. Although each component plays an important
role in supporting successful farming, an exploration of the interaction among components
is likely to be more informative than studying the function of each individual component
(USDA 2009).
McConnell and Dillon’s definition clearly identifies the importance of three key elements of
an agricultural systems: the interaction, the boundaries and the objectives. These three
should be understood when studying an agricultural system. The approach in this study of
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identifying and understanding the boundaries, interactions, and objectives of the
smallholder beef farming system in rural Java will be further explained in Chapter 3.
In order to set up the boundaries, the level of the system should be determined.
McConnell and Dillon (1997) presented 16 levels of agricultural system, from macro to
micro level. The first six levels are as follows:
1. The sectoral system. This is the highest level, comprised of “all agriculture” system
at national or regional level.
2. The sub-sector system, which consists of subordinate subsectors or subsystems,
supporting the sectoral system. This includes agricultural credit, education,
research, production, transport etc.
3. The industry system. At his level, the focus lies on the commodity-based industry
system supporting each such (sub) system, such as for coconuts, rubber, wheat,
coffee, fish etc.
4. The village-community system. This is where such commodities are produced at
the village level.
5. The farm-household system. This level focuses on farming activities and the
livelihoods of individual households in the village or community system.
6. Further lower levels comprised of the agro-economic structure of individual farms,
their component crop and livestock enterprises, and the activities and individual
agro-technical processes which underlie such enterprises.
As the research was conducted at the farmer group level in a village, it was focused at
McConnell and Dillon’s village-community system level, in this case the farmer group level.
However, the external factors, elements, actors or activities outside the farmer groups
which had relevant connection to this community-level system were also elaborated. This
boundary is important to building the frame or defining the scope of the study, because a
system is always connected to other systems.
At the community level, most of the beef farming is found on mixed crop-livestock farms
(Devendra & Sevilla 2002). In mixed farming, the farmer’s household has to manage a
number of different types of farming activities at the same time (Caldwell 1994). Two
component group of activities played important roles in the performance of mixed farming:
a biophysical component which consisted of livestock, soil, crops, forages and climate; and
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a socioeconomic component, such as people, cultural practices, values, risk attitudes,
goals, knowledge, resources, monitoring opportunities, and decision making (Keating &
McCown 2001; Lisson et al. 2010).
Mixed farming has both advantages and disadvantages. One of the main advantages is
the possibility to reduce risk, spread labour and re-utilize resources. But, at the same
time, it also has disadvantages, such as farmers having to divide their attention and
resources across a range of activities. The importance of these advantages and
disadvantages is likely to vary among regions, depending on farmers’ sociocultural
preferences and the biophysical condition of the area (FAO 2001).
In mixed crop livestock farming, exchange of biomass occurs among farm activities.
Livestock are fed using crop by-product, and in turn, they supply manure and power for
soil tillage. The importance of the role of animals to farm households is significant.
Animals not only act as their insurance when they urgently need large amounts of cash,
but also become a source of income to the household (Siegmund-Schultze et al. 2007;
Herrero et al. 2010).
2.2 Beef Farming in Indonesia
2.2.1 Overview
The development of beef farming in Indonesia started in 1906 when the Dutch, who
governed Indonesia at that time, imported Ongole cattle from India to Sumba Island in
East Nusa Tenggara, East Indonesia. These white cattle were then known as Sumba
Ongole (SO). In 1920s and 1930s, SO were distributed to Java in order to improve the
quality of the local Java Cattle. Then, in 1936 the government endorsed a regulation that
all Java cattle bulls should be castrated and replaced with SO. As a result, Java Cattle
were transformed into larger humped white cattle known as Peranakan Ongole (PO,
meaning Ongole Cross) that until recently dominating beef farming in Java. This
upgrading was meant to obtain stronger and bigger cattle which had more power as
draught animal in sugarcane plantations. Almost 30 years after Independence, in the
1970s, the Government of Indonesia mapped the distribution of cattle breeds in Indonesia.
The PO were distributed only in the western part of Indonesia (Java and Sumatera),
Madura Cattle in Kalimantan (Borneo), and Bali Cattle in the Eastern Indonesia (see
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Figure 2.1 and 2.2). In the 1980s the Government started to introduce many exotic breeds
(Diwyanto 2008).
Figure 2.1 Distribution of Cattle Breed in Indonesia (Original map source : Bakosurtanal (2011))
Figure 2.2 Common Breeds of Beef Cattle in Indonesia (a) PO Cattle; (b) Bali Cattle (AIAT 2010) ; (c) Madura Cattle (Siswanto 2014), and (d) Simmental Cross
Beef cattle are commonly raised in mixed crop-livestock farming. Based on the purpose,
beef cattle farming can be categorized into two major types, breeding and fattening
(Ensminger & Perry 1997). The main purpose of breeding is to produce calves which will
PO CATTLE
BALI CATTLE
MADURA CATTLE
(a) (b)
(d) (c)
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be sold at weaning or at one year old as yearlings (Boykin et al. 1980) whereas fattening
refers to fattening up of calves and steers to produce high quality meat (Perry 1992).
In Indonesia, breeding is conducted mostly on smallholder farms. Although breeding is
considered to be a key factor contributing to the development of beef farming and the
demand for steers is continually increasing, the industry is not attracted to the idea of
establishing breeding farms. The limited turn-over and the long investment period are two
major limiting factors for this (Boediyana 2007; Diwyanto 2008).
There are at least six actors that play an important role in shaping the beef industry in
Indonesia; smallholder producers, commercial feedlots, processors, transport operators,
traders, and consumers (Hadi et al. 2002). The behavior of these actors will determine the
future of national beef production. The nature of recent Indonesian beef cattle farming is
characterized by the very considerable gap between large-scale and smallholder farmers
in Indonesia. Larger farmers – the agribusiness companies - prefer to focus only at the
downstream end of the industry, i.e. importing and trading simply because these activities
have a fast turnover and lower risk. The upstream activities with a very limited margin –
breeding and rearing – are mostly dominated by smallholders.
2.2.2 Smallholder Beef Farming
The term smallholder refers to peasants who rely on small plots of land for their survival. It
is characteristic of farming in the developing the world, utilizes high inputs of labour, low
level of capital, and involves concentrated use of land (Overton 2007). With herd size
ranging from 1 to 4 cattle per farmer, smallholder beef farming is done by more than four
million households in Indonesia (Boediyana 2007). However, smallholders are the
backbone of the meat supply in Indonesia (Ministry of Agriculture of the Republic of
Indonesia 2010), both in terms of the number of operations and overall production.
Smallholder beef farmers are responsible for more than 70% of Indonesia’s beef
production. However, their individual productivity tends to be low due to inadequate
feeding, disease and low use of production technology (Hadi et al. 2002; Patrick et al.
2010). Throughout South East Asia, especially on intensive crop-livestock mixed farming,
zero grazing is the common feeding system for smallholders. Cattle are kept in sheds and
farmers cut grass from forests, fallows, rangelands, roadsides, wastelands, and from
cultivated areas after harvest and carry it to their cattle (Devendra & Sevilla 2002).
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In many parts of Indonesia, smallholder farmers traditionally feed their cattle using cut and
carry systems (Hadi et al. 2002). Dry rice straw, a by-product of their paddy cultivation, is
the major feed component. The straw is collected shortly after paddy harvesting, carried
and stored close to the cattle shelters; although this results in poor performance, it reduces
costs since it optimizes agricultural waste. Farmers will also collect grass when it is
available. Cattle are mostly kept in a stall or shelter near the farmer’s house.
Occasionally, cows are grazed on river banks or forest margins for physical exercise and
to maintaining their fertility.
Artificial Insemination (AI) has been adopted by some farmers. Semen from exotic breeds
such as Simmental or Limousine is preferred because cows will produce bigger calves
with better weight gain and higher price than local calves (Hadi et al. 2002). Calves will be
sold as soon as they reach a particular live weight or when the farmer needs a large
amount of cash (Hadi et al. 2002).
Related to cattle productivity, the average body weight of 13–24 month old PO cattle
varies from 200–300 kg; 400–450 days of calving interval (Yusran & Teleni 2000;
Sugiharto et al. 2004); and average daily weight gain (ADWG) is 0.30–0.40 kg/day without
feed supplementation (Sugiharto et al. 2004) and 0.45–0.62 with concentrate
supplementation (Purnomoadi et al. 2007). These figures are similar to the performance of
Ongole cattle in India under natural traditional conditions (Gaur et al. 2002). Although
ADWG can be further improved to more than 1 kg per day with improved feed (Bata 2007),
most smallholders use natural feeding with no supplementation. The breed type also
influences ADWG. The ADWG of calves produced from PO cows in Indonesia is about
0.6 kilograms, whereas ADWG of calves born to Friesian Holstein Crossbred cows with
semen from Simmental crossbred bulls is 1.2 kilograms or higher (Hadi et al. 2002),
whereas the ADWG of Bali cattle ranges from 0.29–0.42 kg (Damry et al. 2008).
Therefore, feed and breed contribute to the productivity of the cattle farming. Farmers
need to decide which feed and breeds are suitable with their farm.
For smallholders, cattle can be very important social and financial instruments. Cattle are
not only a source of income but are also a valuable asset (Patrick et al. 2010). Socio-
cultural value, wealth status, as well as family savings and security are major benefits of
beef production for smallholders in developing countries (Stroebel et al. 2008; Huyen et al.
2010). Cattle have a significant role as a financial buffer for the household during times of
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drought or crop failure (Dovie et al. 2006) since farmers can easily sell their cattle if they
need large amounts of cash (Siegmund-Schultze et al. 2007).
2.2.3 Statistics on Population and Import
From 2000 to 2010, the total population of cattle in Indonesia increased from 11 million to
13.6 million. Meat production also increased, from 339,900 to 409,300 tonnes (DGLS
2011). The latest livestock census, in 2011, showed that the population of beef cattle in
Indonesia had reached 14.8 million (DGLVS 2011c) (see Figure 2.3 and 2.4). These
figures include imported feeder cattle, which averaged 350,000 animals per year
(Boediyana 2007). Figure 2.3 shows that the cattle population has significantly increased
since 2006, but at the same time, as shown in Figure 2.5, the value of imported live cattle
to Indonesia was also increased.
Figure 2.3 Cattle population in Indonesia from 2000 – 2011. Data source (DGLS 2011)
Assuming that each person consumes 2 kg of beef per year (Arifin 2009), and the total
population is 237.6 million (BPS 2010), Indonesia needs more than 470,000 tonnes of beef
per year. It means that Indonesia has to import more than 60,000 tonnes of frozen beef
per year to supply the deficit. Figure 2.5 shows the value of imported feeder steers and
beef during 2004 – 2008. By the end of 2008, the total value of imported feeder steers
was US$ 378.1 million and US$ 126.1 million for beef (DGLVS 2009) and it had increased
significantly from 2006.
In 2009, Indonesia imported more than 720,000 live cattle, and 120,000 tonnes of frozen
beef, the highest levels in decades (DGLVS 2011c). But the government was then
gradually reducing the import quota. Up to October 2011 from a quota of 600,000 head,
Community independent bodies, mostly related to religion; such as pondok pesantren (education institution focused largely on Islamic studies), parish, seminary, vihara (Buddhist monastery)
Farmer group experienced in beef farming
Source: (Minister of Agriculture of the Republic of Indonesia 2009; DGLVS 2011d)
The review of the SMD programs in program years 2008 and 2009 was conducted by
Yuwono and Sodiq (2010). Their report focused on the performance of 574 imported
Brahman cross cows at 43 village breeding centres in 10 districts in Southern Central
Java. This study revealed some important issues::
more than 70% of the cows were pregnant when received by farmers, but the
occurrence of second pregnancy was considerably lower, less than 3%,
in terms of body weight, cows were poorly underweight, with body condition scores
ranged from 2 -3 on a scale of minimum of 1 and maximum of 6,
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calf and cow mortality rates were relatively high, with calf mortality more than 30%,
and cow mortality almost 10%, and
half of the farmers tended to refuse to retain the Brahman cross cows. Farmers
argued that production and reproductive performance and selling prices of Brahman
cross are low.
In conclusion, Yuwono and Sodiq (2010) stated that in regards to breeding performance,
SMD in Southern Central Java had failed. They argued that Brahman cross is not the
most suitable breed because it requires good quality feed which is mostly unavailable or
unaffordable.
Despite these three programs having been carefully designed, the results were not as
expected. This indicates that many problematic situations occurred during the
implementation of the program. This study tried to map these problematic situations in a
quest to develop appropriate intervention strategies. With regard to the importance of
smallholder beef farming to support national beef production, this study focused on the
program which emphasized smallholders and beef farming – the SMD program.
2.3 Chapter Summary
Chapter 2 discusses the nature of the agricultural system which is the focus of this study.
The chapter provides information on what an agricultural system is, and provides a
description of farming practices in Indonesia. The essential aim is to give a background
idea of possible sub-systems or components of the beef farming system in Indonesia.
This insight is important to help answer research question number one which focuses on
describing the behaviour of the smallholder beef farming system.
The development of beef cattle and beef farming in Indonesia is explained in Section 2.2.
Three major programs for the development of the beef cattle industry are outlined.
Despite their weaknesses, in terms of the design, coverage and target these programs
provide an opportunity for farmers or other community member to improve their welfare.
As this study is focused on smallholder beef farmer, the SMD program is receives more
attention due to its main concern with beef cattle as the core priority and beef farmers as
the prime target.
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There are at least six actors shaping the development of the beef industry in Indonesia;
smallholder producers, owners of commercial feedlots, processors, transport operators,
traders, and consumers (Hadi et al. 2002). Therefore, improvement of the industry
requires an approach that is able to acknowledge that complexity. The systems thinking
approach is considered to be a promising approach for delineating and understanding that
complexity, as an entry point to the formulation of better interventions than those
generated from studies which consider beef farming as an independent activity. The detail
of the systems thinking approach will be further discussed in Chapter 3.
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Chapter 3. Systems Thinking
This chapter will discuss the approach that will be used in this research, systems thinking.
Systems thinking has been briefly discussed in Chapter 1. Chapter 3 will provide more
information about what systems thinking is, the history of systems thinking, and its
application in several different studies.
This chapter starts with the definition of thinking, a process of taking information,
structuring and organizing it in such a way to do something meaningful (Cabrera 2012).
One type of thinking is systems thinking which will be discussed further in this section.
3.1 The Importance of Systems Thinking
The meaning of “system” has been interpreted in various ways. However, the definition
provided by Ackoff (1994), a professor emeritus in philosophy of science, in his paper
(page 175) can be considered as a starting point of the discussion:
‘A system is a whole consisting of two or more parts (1) each of which can
affect the performance or properties of the whole, (2) none of which can have
an independent effect on the whole, and (3) no sub group of which can have an
independent effect on the whole’
Three terms are inherent when we discuss the definition of systems. These are: ‘objects’
which are parts or elements of the system; ‘attributes’ as properties of objects; and the
‘relationship’ which links the objects. Taken together, this trinity defines ‘a system’ (Hall &
Fagen 1956). When a problem occurs within this trinity, it creates messes (Skyttner 2001),
a condition where problems emerge, not only from a technical and organizational aspect
but also interacting with the social and political aspects. Within a social system, each and
every part of the system has its own goal. This condition made social systems more
complicated than mechanical or organismic systems (Ackoff 1994).
The story of the blind men and the elephant is a common metaphor used to explain the
systems thinking approach (e.g. Nguyen et al. (2011b)). If six blind men are asked to feel
an elephant, they will end up with different conclusions about the elephant according to
whether they touch the trunk, the leg, or the tail. This is simply because individually they
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did not get the whole picture. Senge (1992) used the elephant in another way, to explain
one law in systems thinking; “split an elephant in half, and you will never get two small
elephants”. These are very simple metaphors to explain “wholeness”: A system is not a
sum of its parts, and dividing it will result in incomplete and irrelevant outputs.
This wholeness concept leads systems thinkers to adopt a “pluralist” paradigms as
opposed to “reductionist”. Reductionism assumes that reality can be reduced into parts,
and from the parts an explanation of the whole reality can be deduced. Also, reductionism
tends to use “scientific methods” analysis to reduce complexity - developing a hypothesis,
and experiments to prove the hypothesis - to investigate an object. Within the reductionist
paradigm, environmental elements are mostly avoided because they can distract from or
interfere with the observed variable (Skyttner 2001). The contrast between reductionist
and pluralist approaches is summarized in Table 3.1.
Table 3.1 Contrast between reductionist and pluralist
Components Reductionist Pluralist
Method of understanding
Analysis; understanding progresses from its parts to the whole
Synthesis; understanding progresses from the whole to its parts
Focus of interest Create detailed knowledge of a system’s structure
Create knowledge of a system’s function
Power of finding Considered as describing phenomena
Considered as explaining phenomena
Impact on observer Reduces the focus of the observer Expands the focus of the observer
Focus of finding Concentrates on static and structural properties
Concentrates on the function and behaviour of whole system
Output of study Give description and knowledge Provides explanation and understanding
Adapted from Skyttner (2001).
One major factor contributing to the failure of an organization commonly lies in its inability
to recognize and respond to impending threats as a result of the organizational habit of
conducting so called ‘snap shot’ analysis, an analysis focused merely on readily
identifiable problems and based on short-term indicators (Senge 1997). Systems thinking
is an awareness of an organization as a complex, integrated system whose parts are
connected with each other in some way. Changes in one part will affect others, instantly or
gradually (Tedeschi et al. 2011).
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Systems thinking is a ‘discipline for seeing wholes’ (Senge 1992); similarly Weinberg
(1975) pointed out that systems thinking is ‘a way of looking at the world’. As a system is
constituted of its parts, a systems’ performance follows the Composition Law of Aristotle
i.e. ‘the whole is more than the sum of its parts’ (Weinberg 1975). The system is ‘never
equal to the sum of the actions of its parts taken separately’, but it relies on how one part
interacts with others (Senge 1992; Ackoff 1994). Further, Senge (1992) emphasizes that
systems thinking is about wholeness and complexity. One will never get the substance
while focusing only on the detail of the complexity while neglecting the interrelatedness,
the dynamic of structural patterns of interrelation among the elements.
3.2 Smallholder Farming and Systems Thinking
System thinking emerged to deal with complexity (Maani & Cavana, 2007). In the
developing world, it has been applied to explain systemic complexity encountered, for
example in the tourism industry in Vietnam (Mai & Bosch 2010) and forest management in
Indonesia (Purnomo & Mendoza 2011). Mai (2010) points out that systems thinking is a
powerful tool because it is able to describe the interrelations among economic,
environmental, and socio-demographic sub-systems, to identify the root cause of a
complex problem and to determine the intervention leverage point (in that case for the
development of tourism).
As discussed in Chapter 2, smallholder farming is a complex system with multifaceted
roles. Farmers have to simultaneously make many decisions as part of the strategy by
which they sustain their farming. The strategy has to go beyond the technical agricultural
aspects of farming, frequently involving social, economic, and even sometimes political
elements. This makes it difficult to study smallholder farming using conventional linear-
partial approaches (Snapp & Pound 2008) or reductionist approach. Further, Snap and
Pound (2008) argued that in some way, smallholder farmers are systems thinkers because
farmers have to balance many different aspects. From a technical point of view, farmers
need to consider what crop to grow or what animal to keep, where and how. From an
economic point of view, farmers need to balance between the immediate household
needs, and long-term objectives, such as education for their children. Farmers also have
to think of possible combinations of mixed farming and opportunities for off-farm income-
generating activities, as well as their time allocation for farming activity and for performing
social roles and responsibilities in the community. To handle all of this complexity,
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smallholder farmers rely mainly on their experience, natural indicators, and some
information from other sources such as extension officers, other farmers, and TV, radio or
other media.
One key characteristics of smallholder farming, is the interconnectedness among activities
on the farm, in the household, and in the wider community or economy (MacLeod et al.
2011). External factors such as market prices, consumer preferences, and the political
situation can have a significant influence on smallholders (Pound, 2008). Thus
smallholder farmers are involved with a wide variety of actors having a range of different
interests and objectives, as demonstrated by Hounkonou et al. (2012) in their study to
develop smallholder farming in West Africa. Acknowledging smallholder farming as a
social system consisting of different stakeholders with a wide variety of interest makes an
important contribution to the success of a development strategy (Kaufmann 2007; Binam
et al. 2011).
Another characteristic of smallholders in developing countries, especially in countries that
experienced a long period of colonisation, is the power asymmetry known as “the big man
syndrome”, a condition where some people, or groups of people, are more favoured and
dominant over others who are marginalized (Ayittey 2006; Hounkonnou et al. 2012).
Farmers in smallholder farmer groups in Indonesia, a country with history of more than
three centuries of colonialism, will be likely to experience this power inequality among
group members, even to a level where it has the potential to obstruct the team learning
process (Van der Vegt et al. 2010; Bunderson & Reagans 2011).
It becomes clear that if we are to understand smallholder farming it will be essential to
adopt an approach that can logically and systematically take into account:
the different short and long-term perspectives that smallholders have to deal with;
the different and simultaneous decision-making and other roles that smallholders
must undertake;
the interconnectedness among the activities that the smallholder is involved in, in a
range of spheres (farm, household, community, economy, political);
the range of actors associated with smallholder farming, and the fact that each has
their own interests and objectives; and
power asymmetries that exist within and between groups of actors;
29
It is only by acknowledging and accounting for the complexity arising from these
characteristics of the smallholder farming that it will be possible to obtain the level of
comprehensive understanding of the system necessary for the formulation and
implementation of effective development interventions.
The concept of levels of thinking can be used as an entry point to understanding systems
thinking. There are four levels of thinking: events, patterns, systemic structures, and
mental models which form an “iceberg” of hierarchical models of thinking (see Figure 3.1)
(Maani & Cavana 2002, 2007). As seen in the figure, the most observable top of the
iceberg is the events. Usually, these events describe only the symptoms of reality (Maani
& Cavana 2002). In fact, although representing only the smallest part of the whole thinking
level, most interventions are based at this level of thinking because “the events” are the
most noticeable part and often need immediate attention and action. When a set of events
are linked together, they create a trend or pattern, which lies deeper than the events.
Accordingly, when different patterns of the system interrelate it creates systemic structures
which present causal relationship among elements. The biggest and most fundamental
part of the iceberg are the mental models which hardly ever come to the surface.
However, this is the most influential component because it represents our beliefs and
values which lie beneath ‘how we understand the world and how we take action’ (Senge
1992; Maani & Cavana 2007). Systems thinking will allow us to penetrate to this mental
models level.
Figure 3.1 Four levels of thinking. Source: Maani & Cavana (2002 ; 2007)
When applied to the complex situation of smallholder beef farming in rural Java the
systems thinking concept of levels of thinking will provide a platform for the researcher to
discover the “deeper pattern” which lies beneath “the events”, so as to access “the
structures” that create the system reality.
30
3.3 Short History of Systems Thinking and Key Thinkers
From the point of view of theoretical development, three major phases can be
acknowledged as the wave of system thinking development:
from the 1920s to the 1960s, when system thinkers mainly focused on fundamental
development of system thinking concepts among disciplines;
from the 1970s to the 1990s when many specific tools and applied methodologies
were developed, and
the more recent era that has been marked by the development of chaos and
complexity theory (Mingers & White 2010).
In terms of its approach, four types of systems thinking methodologies can be identified:
functionalist, interpretive, emancipatory, and post-modern (Jackson 2002). Their
participants were beef farmers’ representatives and their graduates, local extension
agents, cattle traders, and the program coordinator.
Figure 4.2 Methodological Stage
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4.4.3 Investigating the problematic situation
This stage aimed to explore the problematic situations – i.e. situations in which participants
feel uncomfortable. Another set of interviews was undertaken focussing on the CATWOE
analysis questions of SSM and the 12 questions of CSH from which a problematic
situation can be structured. The results of the interviews were summarized as the basis
for further discussion in a workshop to define the conceptual model of the problematic
situation.
4.4.4 Structuring the problematic situation
This stage was designed to discuss the results of the previous interviews and to generate
the conceptual model of the problematic situation. Adopting 12 questions from CSH might
reveal some problems relating to its implementation. As described in Table 3.4 the
questions are well-structured in a rigid manner. However, smallholders commonly feel
reluctant when they have to a make contrast between the existing “is/are” situation and the
ideal “ought to be” condition. Therefore, to make it easier for the participants, the
questions were started with the “ought to be” condition, because many people feel more
comfortable talking about hopes and visions than evaluating the present situation (Ulrich &
Reynolds 2010). Moreover, the flow of the questions followed the recommended
sequence by Reynold (Reynolds 2007). It started with the easiest question which people
were willing to answer. This discussion took place during individual interviews using a
semi-structured questionnaire prior to the workshop to avoid “the reluctance issue”
discussed above. This initial interview aimed to assess farmers’ opinions and
perspectives which could then be used as an opening for further discussion in the
workshop session.
A workshop facilitator was appointed to ensure that the discussion was not dominated by
one individual or group. The workshop aimed to develop a conceptual model of the
problematic situations. Participants at this workshop were similar to the previous one.
Actions carried out at the workshop were:
1. Performing CATWOE analysis of the SSM and 12 questions of CSH.
2. Defining several problematic situations, gained from contrasting the ideal to the
actual situations of the farming.
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3. Discussing with stakeholders to seek their consensus on the agreed problematic
situations.
4. Developing a conceptual model of the problematic situations. This included
defining how human activity leads to the existing problematic situation. These
activities were visually described in a problem-oriented context diagram which then
was further developed into causal loop diagram (CLD) and dynamic modelling using
the system dynamics approach.
4.4.5 Translating the Problematic Situations into Causal Loop Diagrams (CLD) and
Identifying the Archetypes
In this stage, each problematic situation in the model was translated into a causal loop
diagram. This process took place in the University of Queensland, Gatton. For this
purpose, the researcher used Vensim software. It commenced with a simple loop. Then,
additional loops were incorporated. After all of the problematic situations were translated
into causal loop diagrams, the next step explored possible archetypes within the CLD.
Each archetype would suggest different leverage points for the intervention strategy.
Then, both the CLD and the archetypes were refined in a small group discussion which
involved the representatives of actors in the system. This was achieved by contrasting the
CLD with the real world situation. Some adjustments and modifications were made to
ensure that the loops and linkages made sense and were able to mimic the real farming
situation. Once the was CLD was regarded as being adequately capable of describing
the real world situation, the next step was transforming the CLD into stocks and flows
modelling to generate the dynamic model of the smallholder beef farming.
4.4.6 Developing Dynamics Model and Simulating Intervention Scenario
This stage was conducted by the researcher at the University of Queensland using iThink
software. The technique was similar to the previous stage of translating the problematic
situations into CLDs. It also started from the simple loop. The first simple loop was
translated into a stock and flow model. Then, other loops and converters were included
until all loops in the CLDs were translated. The stock and flow dynamics model was then
validated.
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In order to formulate the changes, it was necessary to perform further analysis of the effect
of the proposed changes over time by applying the dynamics modelling. Modelling
provides possibilities to preview whether or not the proposed changes in the systems
thinking world can improve the problematic situation in the real world (Rodriguez-Ulloa &
Paucar-Caceres 2005). For this purpose, several intervention scenarios which had been
identified from the archetypes were simulated. Outputs from the simulation were then
investigated to determine the intervention scenario to be recommended as the selected
strategy.
4.5 Ethical Considerations
The main focus of this research was smallholder farmers who received a government aid
program. Occasionally, the farmers became more sensitive when being asked about their
performance. At some level, farmers think that their answer could be related to the
continuance of the aid program or could affect their chance of applying for another
program. Therefore, to minimize this, at the first stage of the research, the researcher
made sure that the farmers understood that the purpose of this research was not an
evaluation and had nothing to do with any aid program, but rather was an effort to find
strategies to improve their farming. The researcher also needed to convince farmers that
this was independent research and was not affiliated with any political party, sponsor or
government body. Farmers were assured about the issue of confidentiality. All the
recorded data was treated anonymously using coding for the source identification and the
data was stored in a safe place which can be accessed only by the researcher.
4.6 Chapter Summary
An overview of the social research was discussed at the beginning of this chapter. Then
this was followed by a discussion of the studies which have been undertaken previously in
the area of beef farming development in Indonesia. Subsequently, the preview of the
research area was discussed including the step by step research process. This chapter is
intended to provide a point of reference for the possible contribution of this study to
systems thinking knowledge as well as to the development of beef farming in Indonesia.
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Chapter 5. Smallholder Beef Farming in Rural Java; a Case
Study on Two Farmer Groups in Central Java
The research was conducted in two farmer groups located in Central Java Province,
Indonesia. Both farmer groups received grants from the Graduates Support
Farmers/Sarjana Membangun Desa (SMD) program. The province was selected for two
reasons; first, it has the second largest cattle population in Indonesia (Directorate General
for Livestock and Veterinary Services 2011); and second, it is the home of the Faculty of
Animal Science of the University of Jenderal Soedirman which has been heavily involved
in the SMD Program since its commencement. Additionally, the farmer groups were
selected from different batches of the program. Thus the different characteristics of the two
groups should be able to provide a more comprehensive description of the system than
selecting farmer groups from the same batch or with similar characteristics.
5.1 Farmer Groups Selection
As mentioned in Chapter 2, the initial SMD program was commenced in 2007. However,
this batch covered only 10 farmer groups in four provinces. From 2008, the program then
expanded to cover more provinces, including Central Java (DGLVS 2011b). In Central
Java Province, the government distributed four batches of grants annually since 2008, and
more than 50% of the grantees were organized by the University of Jenderal Soedirman.
Therefore, as the initial step of this research, it was relevant to have a discussion with the
program coordinator from this university to explore the implementation of the program as
well as the characteristics of the farmer groups.
Before 2010, it was a program requirement that all beef farmer groups had to keep the
imported Brahman cross cows, but starting from 2010 farmers could have any breed of
cow. For the sampling purposes, this fact should not be disregarded in order to get a
richer picture of the system.
Initially, as mentioned in Section 4.3.3, the farmer groups were to be selected based
mainly on their performance; one group representing high yield group, and the other group
standing for lower yield groups. However, it proved to be impracticable to reach the lower
yield groups, because mostly the groups had disbanded, meaning that it was difficult to
75
locate the entire membership to have a meeting. For that reason, the sample frame was
built mainly on the batch year rather than on the group performance. Thus, the whole
farmer group population was divided into two categories, based on whether they received
their grant before or after 2010 (see Table 5.1.)
Table 5.1 Distribution of Beef Cattle SMD Farmer Group Organized by the University of Jenderal Soedirman
No Kabupaten Batch Year
2008 2009 2010 2011
1 Banjarnegara 3 2 - 4
2 Banyumas 7 7 4 4
3 Brebes 1 2 5 -
4 Cilacap 1 4 1 -
5 Kebumen 1 2 5 11
6 Pekalongan - 1 - -
7 Pemalang - 1 - -
8 Purbalingga 5 1 4 3
9 Purworejo - - 1 3
10 Tegal 1 2 - 2
11 Temanggung 1 2 - -
12 Wonosobo 1 - - -
Sub Total 21 24 20 27
Total 45 47
Data source: (DGLVS 2011d; Sodiq 2012)
Two groups, “Sari Widodo” and “Mugi Lestari” were selected as the two main participants
of this research. All of their members are involved in the interviews and workshops. In
addition, three disbanded groups were also observed. However, due to the unwillingness
of some members of disbanded groups, only their group leaders and the associated
graduates were included in this study.
The Sari Widodo and Mugi Lestari farmer groups were selected on the basis of the
following consideration:
1. They both still run their cattle farming.
2. Diversity of grant years. Sari Widodo received their grant in 2008, whereas “Mugi
Lestari” received theirs in 2011. The two groups have different program
regulations.
3. Variety of farming. Sari Widodo practiced a variety of farming; rice, fish, and beef,
whereas Mugi Lestari focussed only on beef farming.
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4. Labour management variation. Labour in Sari Widodo was provided by their entire
member, whereas Mugi Lestari appointed two of their members to take care of most
of the daily farming activity, such as collecting the forage, feeding, and cleaning the
animal housing. The different levels of member involvement and interaction might
contribute to different group dynamics because more interaction will create a better
social capital (Aquino & Serva 2005).
5. Maturity of the group. Sari Widodo is a mature group which was established in
1978; “Mugi Lestari” is a relatively new group established in 2010. The different
levels of group maturity might lead to different group dynamics which should be
taken into consideration. A new farmer group, established just prior to program
commencement, can be expected to have less bonding and trust among members;
a more mature group that existed long before the program commenced is likely to
have a strong social bonding to help it to survive from any external pressures.
Social bonding, in the form of trust, is critical to support group performance (Maani
& Maharaj 2004; Barham & Chitemi 2009). Therefore, group maturity was a factor
that could not be disregarded. Although there are many more characteristics, such
as heterogeneity, assets, or gender, which may affect the performance, group
maturity is considered to be a crucial one (Maani & Maharaj 2004).
As the study was based mainly on those two groups, the results and recommendations of
this study can be seen as limited to those groups only. However, as the non-sampled
groups were also dealing with the similar socio-economic situations and under the
guidance of the same program, the approach applied in this study can be used as a
reference to study those other groups.
5.2 Profile of Sari Widodo and Mugi Lestari Farmer Group
The Sari Widodo farmer groups sits in the densely populated village of Blambangan which
has total of 330 ha of land, and is home to more than 4,600 inhabitants of whom more than
60% are farmers (Badan Pusat Statistik Kabupaten Banjarnegara 2011). Sari Widodo has
three types of farming; rice, fish, and beef farming. Some of the rice farming areas are
currently combined with fish farming (see Figure 5.1).
The Sari Widodo farmer groups was established on the 7th of July, 1978 in Kabupaten
Banjarnegara, Central Java Province. The group was initially formed by rice farmer to
77
facilitate access to agricultural innovation. It grew as new members joined, not only from
rice farmer but also fish and beef farmers. Currently, Sari Widodo has 22 active members.
Therefore, this farmer group plays important role as an example for the surrounding
farmer.
Figure 5.1 Rice cultivation (a), beef farming (b), fish pond (c) and rice-fish integration (d) in Sari Widodo Farmer Group
In 2008, Sari Widodo received an SMD grant of Rp363 million (equal to around AUD
$38,000). This grant was used to buy 35 cattle; 12 cows of Brahman cross and 23 local
bulls. The cows were allocated for breeding as mandated by the program, whereas the
local cattle were for fattening.
The leader of this group has been in the business of beef farming since he was 14 years
old when he started to collect forage for his father’s cattle. He is one of the founders of the
group. Despite his job as elementary school teacher, he continued to raise cattle. He
retired from teaching in 2002, and was appointed as the group chair in 2005. Currently,
Sari Widodo focusses on fattening rather than breeding. The leader argued that fattening
a b
c
b
b
d
b
b
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has a faster production cycle with an average of three cycles annually, thereby minimizing
long-term risk.
Regarding to the problematic situations, the group leader mentioned that the most difficult
time was during 2009 – 2010 when imported cattle suppressed the local cattle price. In
addition, the breeding cows’ performance has been far less than expected. Most cows
had difficulties in becoming pregnant a second time..
The other farmer group, Mugi Lestari, is considerably younger than Sari Widodo. Mugi
Lestari was established in 2010 in Desa Karanggintung, Kabupaten Banyumas about 70
km from the previous group. It has 11 members and focus on beef farming only. In
2011, this group received an SMD grant of Rp325 million (equal to AUD $ 34,000) which
was used to buy 26 steers and 12 cows. They were also allocated a grant to build the
animal housing. In June 2012, the population was 10 cows, 10 calves and 11 feeders,
45% lower than its initial purchase of 38 head of cattle.
Figure 5.2 Beef Farming in Mugi Lestari Group
Unlike Sari Widodo which focused only on fattening, Mugi Lestari operates both cow-calf
production as well as fattening. Further exploration with the members to reveal their
motives for having the cow calf production showed that it was simply because of the
program regulations. As they received the SMD grant less than 3 years ago, they have to
follow the contract requirement that they should have a breeding operation for at least 3
years.
Although considered a new group, its members were selected from experienced beef
farmers. They formally established the group as a way to obtain capital from the
government. One of the elders in the group, 62 years old, was appointed as the group
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chair. However, the 35 years old group secretary is the one who makes most decisions
regarding group resource allocation.
As SMD grant recipients, both groups have to work together with a university graduate.
Although both are fresh graduates with limited experience in beef farming practice, they
can easily access the university whenever they need to seek information.
In order to have a description of the system, the initial focus of this research was the
household. After that the current situation of the beef farming system is discussed in a
quest to generate a better understanding of the system. Later, the aspects of the current
situation which are considered to be uncomfortable will be structured to identify their
problematic situations.
5.3 Households Agriculture
Agriculture was the main source of household income for almost 70% households,
whereas livestock was complementary. However, the term agriculture in this case has a
broader meaning, covering a variety of activities; not only rice cultivation but also corn,
ground nuts, soy beans, and even fish farming. Commonly, farmers combine two or three
commodities in one plot of land, for instance, rice cultivation can be combined with corn,
soy beans or fish farming; fish ponds can be combined with chili and sweet potato (Figure
5.3). The main commodity produced was rice. In a year, the land can be cropped three
times with different crop; it can either rice – rice – corn/groundnuts; or rice –
corn/groundnuts – rice. But when they predict that the year will be dry, they will do rice –
ground nuts – corn.
The farmers considered agriculture to be their main source of income, because it was able
to provide income on a relatively regular basis because those agricultural activities follow a
seasonal pattern. On the other hand, although farmers acknowledged that cattle were
able to provide large amounts of cash instantly, livestock was not regarded as the main
source of income because it was unable to provide regular income. Fewer than 30% of
farmers sold their cattle regularly (3 - 4 times a year). In many cases, farmers sold their
cattle only twice a year, in the two peak seasons in Indonesia; the Idul Fitri and Idul Adha
feasts.
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Apart from its regularity, farmers considered agriculture as an important and a have-to-do
activity for the household security reasons. They tend to combine a variety of agricultural
commodities in order to ensure that their household foods were secured. This was
indicated by their answer when they were asked about the most important commodity for
the household. More than 90% answered that rice was the most important product.
Moreover, livestock were relatively less important to the household because its purpose
was for sale only. Farmers rarely consume beef.
Figure 5.3 Combination of Rice and Corn (a); Rice and Soy Bean (b); Rice and Fish (c) and Fishpond, chili and sweet potato (d)
It can be concluded that for smallholders, household food security is the number one
priority. Therefore all their activities are valued first for their contribution to household food
security. Then any other income generating activities, such as fish or livestock farming
were regarded as supporting activities. With regard to labour allocation, less than 25% of
the households used family labour other than the household head. Mostly, the household
head was the main labour source, and whenever there was a need for additional labour;
they employed labour from outside the household. This was because most of the farmers’
sons were not interested in working on the farm.
a b
a
c
a
d
a
chili
Sweet potato
Fish pond
Rice
Fish
Rice Rice
Soy Bean
Corn
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The household head was the one who took the responsibility for all agricultural activities,
including allocating farming resources. With regard to education, almost 40% of the
household heads had graduated from elementary school (year 6), almost 25% from junior
high school (year 9), whilst the rest had a higher education level (year 12 or more).
5.4 The Current Practice of the Beef Farming - Identifying the Problems
in an Unstructured Situation
This section provides a description of the current situation of smallholder beef farming in
both farmer groups as revealed by interviews and discussions with all 34 farmers, one
SMD program coordinator, two graduates, two government officers in livestock service
office, and two cattle traders. In-depth interview with four farmers were also carried out to
provide more detail about the issues. Understanding the context is a crucial step in
structuring the problematic situation of the system (Ackermann 2012). Therefore, the
description in this section tries to describe the situations which potentially contributed to
problematic situations. These unstructured issues are summarized in Section 5.5 for
further discussion.
5.4.1 The Farmer Groups
Based on their objectives, both groups managed both types of beef farming, breeding and
fattening. The main purpose of breeding is to produce calves. Regular income was not
the main objective. Cows represented a form of household saving or security instrument.
Forage and/or rice straw were the only feed, without any concentrate. On the other hand,
fattening focused on weight gain. Regular income was the main purpose of the farming.
Fatteners rarely considered their cattle as saving, but as an economic commodity, a
regular source of cash. Additional feed such as wheat pollard, rice bran, cassava starch,
and/or coconut meal, were commonly given to increase weight gain.
For breeding purposes, also known as a cow-calf operation, artificial insemination (AI) is
preferred over natural insemination. AI using exotic breeds (mostly Simmental and
Limousine) was preferred because it would produce a better-priced calf. The availability of
AI services in all sub-district meant cows can be inseminated without delay.
At present, farmers prefer fattening over breeding. Discussion with inseminators and data
from the local livestock service office indicated a similar trend. From the total target of
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8,000 potential AI acceptors, the uptake was only 6,800 in 2011, 10% lower than the
previous year. Several factors are presumed to contribute to this trend such as: the
increasing importance of cattle to farming households; increases in farmer’s knowledge
and skills, particularly in relation to feed composition and preservation; but mostly because
they believed that fattening was more profitable than breeding. This shift would bring
some consequences.
From the farmer’s point of view, the importance of cattle has gradually shifted from its
social role as a saving and security instrument into a more economic role as an income
generating activity. This was confirmed by 88% of the farmers. When cattle were
regarded as a saving and security instrument farmers did not have any regular sales plan.
They would sell their cattle whenever they could not afford to supply the feed or when they
needed an immediate large amount of cash. Therefore, these farmers tended to be more
insensitive to price changes.
Farmers who regard their cattle as an economic commodity, sell them regularly, usually 2
– 3 times a year. However, because as smallholder their capital strength was mostly
limited, farmers were very sensitive to price changes. They were very vulnerable to price
changes which unfortunately were outside of their control. When the price increased,
farmers tended to buy cattle, assuming that price would keep rising and they would earn
some profit. The reverse was also true, they tended to sell cattle when the price was
falling, because they were afraid that the price would keep falling and they might suffer an
even greater loss. This price sensitivity was a problematic issue among farmers because
mostly they suffered losses.
For feeding practice, both groups used the cut and carry systems. Cattle were housed all
the time. Fresh forage and rice straw were collected every day from the surrounding area.
Occasionally, farmers added supplements such as rice bran, onggok (by product of
cassava starch processing), and/or wheat pollard. Both groups had already cultivated
grass (mainly Pennisetum purpureum/elephant grass) as the source of forage. However,
the amount grown was far from sufficient to support the daily forage demand. Farmers
need to cut the grass from the forest or the river bank. Or, if this still inadequate, rice
straw was the preferred substitute, either fresh or ammoniated. Feeding practices in both
groups are presented in Figure 5.4.
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Figure 5.4 Feeding Practice (a) elephant grass plantation; (b) local grass from forest margin; (c) collecting rice straw; (d) fresh rice straw ready to serve
Unlike the Sari Widodo farmer groups, Mugi Lestari are currently still operating the cow-
calf system. In July 2012, they had 10 cows with 10 calves. However, this was not
entirely a breeding operation. Discussion with the secretary of the group, who was also in
charge of marketing the cattle, revealed that he preferred to buy pregnant cows. Then,
after the newborn calves reached the weaning age of 6 – 7 months, the cows and the
calves would be sold to buy other pregnant cows. He fully understood that this was not
aligned with the goal of the SMD program. However, this practice gave him more chance
to obtain a cash inflow annually for his group. Moreover, when he was asked about his
preference, he preferred fattening. The group operated the cow calf system only because
they had to follow the SMD program guidelines for at least 3 years after they received the
grant.
5.4.2 The Local Government
The shifting trend from breeding to fattening was a dilemma for the government officers.
On the negative side, this shifting resulted in lower cattle population growth. More
a b
c d
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fattening means more cattle were kept only long enough to be fattened and were then
slaughtered. Unfortunately, this included many productive females. On the other hand,
with regard to program achievement, this was not entirely a failure, because one indicator
of program success was the group assets. Fattening tended to have a faster turn over
than breeding. In one year, a fattening operation could sell 2 - 4 times, whereas breeding,
even with the shortest calving interval could only sell once. With the faster turnover of the
fattening operation there was a greater possibility to gain more assets.
Another issue mentioned by the government officers was the lack of coordination between
the livestock office and the farmer groups. After the groups received their grant, they
rarely made a report to the livestock office about the progress of their farming. This did not
specifically refer to the two groups studied, but to all groups receiving the grant program.
When this was put to farmers, they confirmed the situation. They argued that it should be
the officer who visited farmers, not the opposite. However, the officers argued that the
program did not cover funds for monitoring, therefore they could not visit all farmers in the
region.
5.4.3 The Market
In relation to the market, farmers could buy or sell cattle from either local cattle traders,
local markets or occasionally from neighboring farmers. However, due to issues of
practicability and cost efficiency, farmers were most likely purchase or sell cattle through
local traders who were always available when they were called. Selling to, or purchasing
from, local traders mean that farmer did not need to bother with transportation.
Commonly, there are four main vehicles used to transport cattle to and from livestock
market. Figure 5.5 shows these vehicles; (a) small pickup; (b) medium pickup; (c) light
truck; and (d) truck with maximum load of 3, 4, 8 and 14 cattle respectively.
The cost for transportation depends on the vehicle capacity. For local transport from or to
the local markets which are mostly located less than 30 km from farms, the cost started
from Rp150 – 200,000 for the small pickup, Rp200 – 250,000 for the medium pickup,
Rp300 – 400,000 for the light truck and Rp400 – 500,000 for the truck. By doing their
transactions through local traders, farmers did not need to worry about the transportation
cost.
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Figure 5.5 Cattle transport (a) small pickup (b) medium pickup (c) light truck (d) regular truck
However, this practicability came with consequences for the pricing. Cattle prices were
rarely determined by body weight, because neither farmer groups nor the traders had
measurement scales. In most cases, price was based on the estimation and the
appearance of the cattle both of which were mainly determined by the traders. Unlike
farmers, traders had years of experience and were very skillful in accurately predicting
body weight just by examining the cattle’s body condition. Therefore, in many cases,
farmers’ cattle were undervalued by the traders.
Another issue was the farmer’s tendency “to buy cattle which they like and sell when they
need to”. Interviews with farmers from both groups revealed that: farmers tend to choose
cattle which they consider to be handsome cattle - the term refers to physically attractive
cattle according to the farmers’ criteria, such as color and body shape. It was purely an
issue of cattle-likeability. Further discussion revealed that this habit was strongly affected
by their original beef farming purpose; as saving. As a saving mechanism, cattle were not
entirely an economic product. They were more like a social asset; something which was
embodied in the household and made them proud. However, this would also influence the
(a) (b)
(c) (d)
86
price. Handsome cattle were frequently valued higher than others having the same
weight. This tendency often made farmers overvalued the cattle they purchased.
Moreover, there was another unfortunate tendency; to make a sale at a time when farmers
needed cash. This would lead to more unfavorable conditions for farmers. Traders would
set a low price at the time when most farmers were selling their cattle because of a need
of cash e.g. during the school entrance period, between June – August. Buying and
selling conditions were disadvantageous for smallholders.
In the livestock market, cash transactions are more common than bank transfers.
Although a mobile bank unit is available in the livestock market location (Figure 5.6 c), the
transactions was mainly in cash (Figure 5.6 d). Even though the farmers realized the risk,
traders argued that cash was often successful in persuading farmers to sell, rather than
just numbers on a bank form, so that with this way traders could have a bargain price.
Additionally, farmers found that having cash-in-hand was easier.
Another phenomenon in the livestock market was the existence of tukang panteng (Figure
5.6 a), broker-like player found specifically at livestock markets. As soon as a truck was
unloading, they would come and lead each animal. Frequently, they were the ones who
initially set the price. They would negotiate a selling price with the farmers. Then, they
would lead the cattle around the market looking for buyers. In return, they would receive
the amount of the difference between the actual selling price and the initially negotiated
price.
Further discussion with the cattle traders, both local and interprovincial traders, revealed
that since the government slashed the cattle import quota from Australia in 2012 (Ministry
of Agriculture of the Republic of Indonesia 2011) the cattle price continued to increase, up
to Rp7,000 (AUD $0.7) per kg live weight. For instance, steer priced from Rp20,000 –
21,000 in 2011 rose to Rp27,000 – 28,000 per kg live weight in July 2012. This was due
to the unfulfilled demand from feedlots which were formerly supplied from import. This
situation was rather unfortunate for the butcher (jagal), because the meat price was
relatively constant at Rp67,000 – 70,000 per kg whereas the live cattle price increased.
Therefore, although it is illegal, jagal prefer to slaughter female animals, because they
were cheaper (Rp4,000 – 5,000 per kg live weight) than the males.
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Figure 5.6 Regional livestock market (a) tukang panteng (b) livestock market in Banjarnegara (c) mobile banking available (d) cash transaction
5.4.4 The Chain
There are two supply chains of cattle: the beef chain refers to the supply chain of all cattle
ready to be slaughtered (Figure 5.7); and the non-slaughter chain which include calves,
feeders, heifers and productive cows. This second type refers to those not meant to be
slaughtered (Figure 5.8).
The current marketing chain for beef cattle shown in Figure 5.7 revealed that farmers did
not have any access to the local livestock market. They depended on local traders (the
first middleman), mostly at village level, to sell their cattle. Although the local livestock
market was available less than 10 km from the cattle housing, the limited number of
animals sold at one time (two cattle per transaction, on average) made the transportation
cost uneconomic. From the local traders, beef were then being sold to the butchers
through one of eight different pathways (Figure 5.7).
a b
c d
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FARMER
1ST MIDDLEMEN (LOCAL TRADERS)
2ND MIDDLEMEN (REGIONAL TRADERS)
3RD MIDDLEMEN (INTERPROVINCIAL
TRADERS)
BUTCHERS
WHOLESALERSFEEDLOTS
IMPORT
Figure 5.7 Beef Supply Chain from Farmer to Butcher
Although there were 8 different pathways identified during survey of the beef marketing
chain, farmers can only afford to play a role at the upstream end; from farmers to local
traders.
The second chain was the non-slaughter chain. The figure described the marketing chain
from farmers to farmers. There are eight different pathways (see Figure 5.8). In the case
of Sari Widodo and Mugi Lestari, they were mainly accessing the non-slaughter chain for
cattle either weaned calves, feeders or heifers. Similar to the case of slaughter-ready
cattle, in the calves and cows supply chain farmers also did not have access to a local
market to sell their cattle. They preferred not to go to the market for the same reason;
additional cost and less bargaining power against trader. Sari Widodo farmers followed the
shortest pathway; Farmers – Local Trader – Farmers. They sold to a local trader, and also
bought cattle from him. Mugi Lestari did not have any regular traders yet. They usually
sold their cattle to local traders, but bought from wholesalers or regional traders.
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FARMER
1ST MIDDLEMEN (LOCAL TRADERS)
2ND MIDDLEMEN (REGIONAL TRADERS)
WHOLESALERS (INTERPROVINCE
TRADERS)
Figure 5.8 Calves and Cows Supply Chain; From Farmer to Farmer
However, there were also two occasions when farmers could sell their cattle outside the
regular pathways. During Idul Fitri and Idul Adha, two major Islamic celebration days,
farmers mostly sold their cattle directly to the consumers. Idul Fitri is the day when
Moslems end their one month fasting during Ramadhan, whereas Idul Adha, also known
as the feast of the sacrifice, is the day when most Moslems slaughter sheep, goats or
cattle and the meat is then distributed to the poor. These two major days are celebrated
as a symbol of obedience to God. As almost 90% of the 230 millions of Indonesian are
Moslem (Badan Pusat Statistik Indonesia 2014), the demand for cattle during those two
days is enormous. In Kabupaten Banjarnegara for example, the average number of cattle
slaughtered was 9,500 head per year, and 26.32% of them were slaughtered during Idul
Adha Feast (Livestock Services Office Banjarnegara 2012). This high demand results in
an increased cattle price. Therefore, all farmers in both groups tried to sell their cattle on
those two holy days. On these two feast days farmers could sell their cattle directly to the
consumer without involving any other parties such as traders or butchers.
All interviewed farmers were reluctant to go to the butcher. This was driven by the fact
that the butcher rarely set the price of a beast based on its live weight, but mostly by the
weight of the carcass. Standard term of carcass in Indonesia is “all parts of halal-
slaughtered healthy cattle, skinned, decapitated, cut from its legs at the tarsus/carpus, and
gastrointestinal, reproductive organ, udder, tail and all excessive fat removed” (National
90
Standardization Agency of Indonesia 2008). To obtain that carcass, the slaughtering
should also follow the standard. The standard for slaughtering is that the head should be
decapitated between os occipitale and os atlas. Legs should be cut between carpus and
metacarpus for front legs; and tarsus and metatarsus for rear legs. For the tail, at least
two segments of the coccygeal bone (os caudalis) are included at the carcass (National
Standardization Agency of Indonesia 2008).
Figure 5.9 The Local Slaughterhouse; (a) female ready for slaughter; (b) cutting the carcass; (c) transporting to meat market and (d) weighing the carcass
Although the definition of carcass and slaughtering has been standardized, farmers
needed to closely monitor their cattle at the slaughter house. They believed that many
unfair practices occurred during the slaughtering. Meat stealing, and the slaughter point
misplaced (decapitated lower than os atlas – thus some part of the neck above os atlas did
not weighed as carcass) were two common examples. These practices were not
monitored by the butchers, because they will only pay for the carcass weight. It was
difficult for the farmers to do the monitoring because the carcasses were commonly cut
into smaller pieces to suit the mode of transportation which commonly used motorbikes
a b
c d
91
(Figure 5.9). Also there are on average 10 – 30 cattle slaughtered daily between 3.30 am
and 5.00 am which makes it more difficult to do the monitoring.
5.5 Chapter Summary
Chapter 5 provides a general description of the smallholder beef farming system in two
selected farmer groups in rural Java. It started with the reasons behind the selection of
farmer groups, and was followed by an effort to portray the profiles of both groups. Then,
the chapter discussed the farming system at the household level, leading into the broader
farmer group situation. At this stage, the unstructured situation of the smallholder beef
farming is further explored involving four different elements; the farmer group, the local
government, the market, and the distribution chain. It showed that there are many
elements involved in the system. These elements need to be configured in a picture which
is able to describe how the system works (Checkland 1999; Checkland & Poulter 2006).
Therefore, all these unstructured situations will be further shaped and categorized into a
more structured situation in an effort to generate a better understanding of the system
which will be discussed in Chapter 6 in a quest to answer the first research question “What
is the nature and complexity of the interrelationships among elements of the smallholder
beef farming system in rural Java?”
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Chapter 6. Problematic Situation of the Smallholder Beef
Farming
Chapter 5 has provided a general overview of the smallholder beef farming system in both
groups. This Chapter will provide descriptions of the processes of structuring the
problematic situations of smallholder beef farming, defining the conceptual model,
identifying the causal loop diagram, and investigating the system archetypes as well as the
leverage points at which possible intervention can be most effectively promoted.
The interviews which were undertaken with all farmers aimed not only at visualizing an
overview of the system but also constituted an initial effort to structure “the problematic
situation”, i.e. an uncomfortable situation which provokes people to think that something
needs to be improved (Checkland and Poulter, 2006). As points of reference for
interviewees, the researcher set three elements to be identified: the actors; the activities;
and their linkages in the system. The identified actors were then interviewed further to
enrich the findings. The interviews were then followed by workshop in each group which
produced the rich picture of the system. Afterwards, another set of interviews was
conducted using Checkland’s CATWOE analysis (Checkland 1999; Checkland & Poulter
2006) and Ulrich’s 12 questions of CSH (Ulrich 1993; Ulrich & Reynolds 2010) as the main
tools with which to structure the problematic situations. The results were subsequently
discussed at the second workshop which was attended by representatives from both
groups. Finally, the key persons from both groups were interviewed again to clarify the
workshop results. A pictorial summary of the research activities is presented in Figure 6.1.
6.1 Rich Picture
Following the interviews, a workshop involving farmers, graduates, extension agents,
cattle traders, and the program coordinator was conducted for each farmer group to
develop the rich picture. The list of actors obtained from the interviews was presented on a
poster-sized paper for discussion by the participants. Afterwards, based on findings from
the interviews, a diagram of the linkages among actors and their activities was drawn by
the researcher as a draft of the rich picture. This draft was then critiqued by all
participants to ensure that it best-represented the real world situation. Figure 6.2 presents
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the translated version of the original rich picture developed in the workshop. The
visualization as a diagram is important, because it can explain briefly but clearly how the
system works (Salles and Bredeweg, 2006, Salles et al., 2006). Furthermore visualization
encourages learning more than equations or numbers (Mayer et al., 1996, Moreno et al.,
2011).
Figure 6.1 Research activity; Interview and Workshops (a) Interview (b) Group 1 Workshop (c) Group 2 Workshop (d) Second Workshop
The rich picture showed the farm-household and community level system (McConnell &
Dillon 1997). A total of 5 actor categories were identified to have a relationship with the
group’s farming activity: university, government, peer-farmers, cattle traders, and farmer’s
household. The role of each actor is presented in Table 6.1.
At the household level, all farmers in both groups had an area of rice plantation. These
ranged from 1,250 – 12,500 m2 with an average of 2,830 m2. Almost 75% of them also
had a fish pond with the average size of 288 m2; and 32% of them have fish in their rice
fields (combines fish and rice in the same farming plot). All farm activities were conducted
primarily by the household head, because more than 75% farmers from both groups did
a b
c d
94
not use family labour. Farmers could employ casual workers whenever needed, usually
during planting, weeding, and harvesting.
Figure 6.2 The Rich Picture of Smallholder Beef Farming in Rural Java
Table 6.1 Identified Actors within Smallholder Beef Farming Systems
No Actor Role
1 University staff members (Faculty of Animal Science)
Provide expertise to improve farmer’s knowledge and skills particularly on veterinary and feeding technology
Give recommendations to farmer groups when applying for government program aid
Manage the program implementation at the local level
2 Government officers
Extension services and artificial insemination
3 Peer-farmers Including group leaders, are sources of information, knowledge and skills
Buy or sell cattle from and to other peer farmers
4 Cattle traders Provide stock whenever farmers need to buy cattle
Buy and sell cattle
5 Farmers’ household members
Provide labor when required to help the household head to manage their resources
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6.2 The Problematic Situation
Another series of semi-structured interviews of the same participants was then conducted
to structure the problematic situation. The interviews started with the CATWOE questions
of SSM (Checkland 1999; Checkland & Poulter 2006):
1. Customers: Who are the system beneficiaries?
2. Actors: Who transforms inputs to outputs?
3. Transformation: What transformations exist?
4. Worldview: What is the reason for this transformation?
5. Owners: Who can stop or change this transformation?
6. Environment: What constraints are there in the immediate surroundings of this
transformation?
This was followed by the 12 boundary critique questions of CSH (Ulrich 1983) (Table 6.2).
To make it easier for the participants, the 12 questions were first posed in the “ought to be”
mode (Ulrich & Reynolds 2010), following the recommended question sequence by
Reynolds (Reynolds 2007) (Figure 6.3).
“experience suggests it is easier for many people to begin reflecting and
communicating about their “ought” answer, that is, their hopes and visions for
the kind of change to be brought about in a situation, rather than analysing “is”
boundary judgment at the outset” (Ulrich & Reynolds 2010, page 258).
Thus, efforts to unfold the situation of the smallholder beef farming system began with the
question regarding the ideal purpose of the farming [2] (number in the bracket referred the
numbering order of the 12 boundary critiques questions of CSH); then, followed by
questioning “whose purpose?” This leads into the identification of the ideal beneficiaries of
the system [1]. Further, it continued by exploring the values that they considered as the
measure of success of the ideal system [3]. By completion of this step, the participants
have learnt to express their opinions about an ideal beef farming system. In CSH, these
first 3 questions help to enlighten the first of four system dimensions made accessible by
CSH: the issue of motivation (Ulrich & Reynolds 2010).
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Table 6.2. The 12 boundary critique questions of CSH
No Question (is and ought mode)
1 Who are/ought to be the actual beneficiaries of the system, i.e. belong to the group of those whose
interest and values are served?
2 What is/ought to be the actual purpose of the system?
3 What is/ought to be the system’s measures of success?
4 Who is/ought to be the decision maker, i.e. in control of the conditions of success of the system?
5 What resources are/ought to be under the control of the system?
6 What conditions of success are/ought to be outside the control (the environments) of the system
decision maker?
7 Who is/ought to be expert i.e. who provides relevant knowledge and skills for the system?
8 What is/ought to be relevant expertise (knowledge and skills) that should flow into the design of the
system?
9 What is/ought to be the regarded as guarantor, providing assurance of successful implementation?
10 Who are/ought to be the witnesses, representing the interest of those negatively affected but not
involved with the system?
11 What are/ought to be the opportunities for the interest of those negatively affected to have expression
and freedom (emancipation) from the worldview of the system?
12 What space is/ought to be available for reconciling differing underlying worldviews about design of the
system among those involved and affected?
Source: (Ulrich 1983)
Beneficiary PurposeMeasure of
improvement
Decision maker ResourcesDecision
environment
Expert Expertise Guarantor
Witness Emancipation Worldview
Figure 6.3 Sequence for unfolding the boundary questions of CSH (Source: Reynolds (2007) page 106)
The next question related to the resources required to achieve that previously-mentioned
condition of success such as natural, financial, and social capital [5] (same as above,
number in the bracket referred the numbering order of the 12 boundary critiques questions
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of CSH) and who should have the power to control them [4] and what kind of resources
were ideally outside the power of the decision maker [6] to prevent coerciveness. This
second group of 3 questions provide the second dimension of CSH: the power structure
description of the system (Ulrich & Reynolds 2010).
The next set of question related to the knowledge and skills, the human capital, which are
ideally independent from the decision makers. It included all necessary competencies;
which consisted of type and level of expertise [8], and who ought to provide such expertise
[7] to ensure that the farming activity is moving towards the ideal purpose. This brought
the guarantee issue to the surface, ‘what was the assurance that such expert support
would be successful’ [9]. These 3 questions help to make a better understanding of the
knowledge-basis dimension of the system (Ulrich & Reynolds 2010).
Finally, it was necessary to observe the smallholder beef farming from different
perspectives. In what way might the beef farming be considered as harmful rather than
useful? [11]; who had such concerns? [10]; and how ought this worldview difference be
reconciled [12]. These last 3 questions help to describe the fourth dimension of CSH: the
basis of legitimacy with regard to its horizontal social structure (Ulrich & Reynolds 2010).
The results were then collated and listed for discussion at the second workshop. Columns
1 and 2 in Table 6.3 describes the CATWOE analysis which emerged from the workshop.
Following Checkland’s formulation in developing a root definition (Checkland 1999), the
CATWOE analysis in Table 6.3 was then further defined into a root definition as follows;
A farmers’ group owned system which, under the constraints of feed availability,
price uncertainty, lack of access to market, and unfavourable pricing policy,
received government grant funds to purchase, raise, fatten and sell cattle to
transform them into cash. The transformation was being carried out by farmers,
and affected by cattle traders, farmer’s household, and the government. The
worldview behind this transformation is to increase the welfare of farmers’
households by generating additional net revenue.
Transformation (T) is the core of the root definition encapsulating the concepts of the
system. This transformation expresses any purposeful activities which “changes or
transforms some input into some output” (Hardman & Paucar-Caceres 2011). In this
context, participants suggest that the transformation in their beef farming is “raising cattle
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to generate cash”. The CATWOE analysis also identifies some problematic situations:
feed availability, price uncertainty, lack of access to market, and unfavourable pricing
which potentially obstruct the transformation process.
The next step of SSM is to develop a conceptual model which describes the set of relevant
human activities needed to pursue the particular purpose in the system. According to
standard practice, once developed, this model should be debated amongst stakeholders to
seek the most feasible and desirable changes (Checkland & Poulter 2006). However, in a
situation where asymmetric power exists, as in the case of smallholder farmers, comments
which may reflect a disagreement with views of the more-powerful stakeholders are
commonly averted (Hofstede 2001). This can disrupt the model-building process.
Accordingly, to help overcome this possibility the workshop discussion was then directed
into 12 questions of CSH. When mapping the ideal conditions, participants were able to
reach agreement without lengthy debate. It took longer to debate the real “is” conditions,
because of the quite different perspectives held by different participants. The argument
polarized into 3 groups, with Group 1 comprising of farmers, graduates, group leaders, and
traders, Group 2 the government representatives, and Group 3 the Graduates Support
Farmer program coordinator.
The results of the CSH explorations are shown in Table 6.4, columns 3 - 6. To help in
structuring the problematic situations, these elements of CSH were categorized into the
four dimensions of motivation, knowledge, control, and legitimacy (Ulrich & Reynolds
2010). As shown in the Table 4, the 12Q CSH were able to expand the CATWOE’s actors
into three elements; expert, expertise and guarantor, as well as the transformation into
purpose and measure of improvement, thereby providing a richer description of the
system. Moreover it also provided a basis to encourage discussion among participants,
because it allows critiquing of the actual compared to the ideal situation. Disparity of
responses on the purposes, the measure of improvement, and the worldview in the actual
condition reflect that CSH was able to elicit farmers’ views which differed from those of the
government and university representatives.
Further, each of the dimensions was explored to find out what were the reasons behind
these gaps between actual and ideal conditions (presented in Table 6.4). These sets of
reasons allow the researcher to generate conceptual models as an input to develop the
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appropriate intervention model. Compared to the SSM, the 12 boundary critique questions
of CSH clearly provide a richer description of the problematic situation of smallholder beef
farming; this then provides an entry point to taming its complexity.
This is where 12Q CSH complement the CATWOE analysis of SSM. CSH enhances
CATWOE in two aspects. Firstly, CSH enriches the criteria specified in CATWOE. Six
elements in CATWOE were expanded into 12 elements in CSH as presented in Table 6.4.
Secondly, CSH’s ability to distinguish between “the actual is” and “the ideal ought to be”
mode provides a construct for participants to make a comparison.
The “ought to be” mode of the 12Q CSH encouraged participants, including farmers, to
speak and to give opinions about the ideal conditions for farming. Eliciting inputs about
the ideal condition was easier because farmers considered it to be “risk-free”. It was more
challenging interrogating the actual versus the ideal situation. The list of responses
obtained from the previous farmers’ interviews proved to be useful in initiating the debate.
Using this list, even though comments were provided anonymously, made farmers aware
that their opinions were also taken into consideration in the workshop.
Any gap between the real and the ideal situation indicates a potential problem which can
be explored further. For the researcher, this was a practical tool, providing a reference
point in interviews and a focus to encourage discussion. Without this tool, it would be
difficult to define a problem because farmers commonly feel that the existing
uncomfortable situation is “normal”. This tendency is even more likely in a culture which
has high power inequality such as in Indonesia (Hofstede 2001).
The fact that farmers and the government have different purposes and different measures
of improvement indicates that with the 12Q CSH, farmers, although lacking positional
power, were able to express their opinions. Purposes are closely related to motivations
which will influence the level of engagement of the participants with the program
(McAllister 1999) whereas measure of improvement reflects how participant measure the
outcomes of the program. Therefore a proper problem structuring method should
elaborate purposes and outcomes in its framework (Midgley et al. 2013)
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Table 6.3 Stakeholder-generated CATWOE Analysis and responses to the 12 Questions of CSH
CATWOE(SSM) 12Q (CSH)
Element Current situation Element Dimension Ideal Condition Actual Condition
Customers Farmers’ household, cattle traders, government
Actors Farmers Expert Knowledge Farmers together with scientists, the local livestock service office and financial institutions
Group leader, peer farmers. (University and livestock office are always welcome to visit farmers, but farmers are mostly reluctant to come to their offices.)
Expertise Knowledge Farming skills, marketing, network building
Feed preservation
Guarantor Knowledge Knowledge and skills, objective, and politically impartial
Trust and social position
Transformation Raise cattle to generate cash
Purpose Motivation To breed and raise cattle Government: to increase beef population
Farmers: to gain income
Measure of Improvement
Motivation Three indicators of improvement: number of cattle, income generated, group assets
Each pursued different improvement indicator; Government: cattle population; Farmers: sales revenue; Program coordinator: group assets
Worldview To gain revenue for the household
Worldview Legitimacy To increase both cattle population and farmers’ welfare
Farmers’ worldview differed from those of government and program coordinator. Farmers view was improving their welfare; whereas Government and Program coordinator views were that the cattle population should be increased first, and then it would generate more income and improve farmer welfare.
Owners Head of the group, farmers
Decision Makers
Control Farmers Group leader and program coordinator
Environment Feed availability, price uncertainty, access to market, pricing policy
Resources Control Financial, high quality cows, feed, market access
Cattle bought mainly from grant, farmers provide feed, man power, and housing
Decision Environments
Control Fair pricing, fair market Feed price volatility, dependency to local trader, imported live cattle, discouraging practice from politically-affiliated farmer group
Witness Legitimacy Representative of the affected Surrounding farmer, some group member feel as the affected of the program
Emancipation Legitimacy Farmer groups offer a forum or media to discuss the affected perspectives
Routine monthly meeting, but mainly for members only
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The combination of SSM and CSH was able to structure the problematic situations of the
current smallholder beef farming system in a more sophisticated and holistic way than was
provided by SSM alone. The combination of the methodology is useful to identify and to
structure the problematic situation of a system which has multiple stakeholders and has
power asymmetry issues in particular. Once the problems were properly identified and
structured, they could be used as the basis to develop further intervention strategies.
However, the combination has consequences in that it increased the complexity of the
methodology. Participants were exposed to two sets of interviews and workshops. This
required a considerable time commitment from farmers and raised a possible ethical issue
of intrusion into their income-earning activities. Thus, in this study the workshops
schedule were adjusted to coincide with the regular farmers’ meeting so that farmers did
not have to allocate specific extra time for workshops. Additionally, some elements of the
CATWOE and the actual is mode of 12 Questions of CSH were similar. Exposing similar
questions to the same participants might also bring ethical consequences. Participants
might feel bored or ignored as being asked the same questions repeatedly. Nevertheless,
experience from the study showed that this is worth to risk.
During the CATWOE analysis, all participants agreed with the result of the analysis but
when they were exposed to the 12Q of CSH and asked to critique the ideal ought to be to
the actual is situations, some disagreements occurred. The disparity between the farming
objectives of different participants revealed in this study indicates that the methodology
was able to embrace the opinions of the less-powerful stakeholders - the farmers. The
availability of constructs of the ideal and actual conditions clearly provides a reference for
participants to explore and debate their opinions. These debates were summarized by the
researcher into a set of problematic situations and presented in Table 6.4.
This result was then developed to generate a conceptual model: “a set of minimum and
necessary, logically linked activities of how to implement the transformation” (Rodríguez-
Ulloa et al. 2011, page 304), as the basis for the dynamic modelling. This conceptual
model will be further discussed in the next section.
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Table 6.4 Summary of the problematic situation
No Dimension Problematic situation
1 Motivation Large government grant provokes an expectation to gain immediate
household benefit.
Shifting from government’s recommended breeding to farmers’
preferred fattening, thus income becomes the primary measure of
success
2 Control Coerciveness existed. Leader dominated most of the group decision.
However, farmers give great respect to their leader.
Breeding and feeding became 2 major issues related to the resources.
Limited forage cultivation area leads into limited supply of forage. This
potentially constrains the cattle population growth. In most cases, no
records were available as a reference to select good breeding cows.
Markets for cattle were sensitive to cattle import policy increasing
number of cattle for sale
3 Knowledge Farmers only trust their group leader and peer farmers as the source
of knowledge and skills
Feeding issue; selective and partial adoption of feeding strategy
developed by the university
Limited marketing channel; farmers were dependent on local traders
4 Legitimacy There is no forum or media for the affected to express their interest
6.3 The Conceptual Model
In order to translate the current farming problematic situations into a conceptual model, the
list presented in Table 6.4 needed to be further clarified with the participants to determine
“what variables seem to have caused that current farming situation?” Therefore, further
question were addressed by asking “what made these situations commence?” Responses
were then formulated as the conceptual model of the problematic situation of the
smallholder beef farming.
Lastly, to refine this conceptual model, another discussion was undertaken with four key
persons from both farmer groups. The key persons were appointed based on their level of
engagement during the interviews and workshops session. The conceptual model is
presented in Figure 6.4.
Although the conceptual model seemed to provide an explanation of the current motivation
situation, the relationships among the variables needed to be further explored to generate
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more meaning. The discipline of System Dynamics offers a tool to capture those
relationships called the causal loop diagram (CLD) which helps to describe a complex
system by breaking it down into a set of chains of causality (Sherwood 2002). The CLD of
the smallholder beef farming system in Rural Java will be discussed further in the next
section.
6.4 Identification of the Causal Loop Diagram
The main tool of a CLD is feedback loops, which visualize interrelationships in circles,
explaining that every influence is both cause and effect (Senge 1992). Sherwood (2002)
highlighted the importance of CLD in capturing the complex situation:
Drawing and using causal loop diagrams is at the heart of system thinking. A
clear, concise diagram can be enormously beneficial in seeing the forest for the
trees, in clarifying explicitly how things work, and in capturing the essence of
complex situations (Sherwood 2002).
Therefore, the next step was to identify the cause and effect of each variable. These
causal links have polarity which explain how the variables are related (Schaffernicht 2006);
a positive (+) or negative (-) sign near the head of the arrow show whether the variables
move in the same or opposite direction (Sterman 2000). The feedback loops may occur
either in a reinforcing (R) or balancing (B) loop type. Reinforcing loops represent growing
or declining actions in the systems, while balancing loops represent self-correcting
mechanisms which counteract and oppose change (Sterman 2000; Maani & Cavana
2007). Vensim PLE® software version 5.10e was used to translate the conceptual models
into the CLD of the smallholder beef farming system.
As described in the conceptual model (Figure 6.4), there are four dimensional aspects
investigated in the model; motivation, control, knowledge, and legitimacy. However,
before exploring those dimensions, the basic operations of the smallholder farming system
should be identified. The basic diagram for smallholder beef farming is presented in
Figure 6.5.
Beef farming has two objectives: increasing the population and generating income. A
reinforcing loop (R1) represents the basic operation of beef farming. It involves four
variables: group capital; number of cattle purchased; number of cattle sold; and sales
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revenue (Figure 6.5). The diagram also has two dangles, variables included in the
diagram, but lying outside the loop (Sherwood 2002), which is cattle population and
farmers income as two main goals of the system.
DIMENSION QUESTION DRIVING FACTOR
Figure 6.4 Conceptual models of the problematic situation of the smallholder beef farming
The R1 loop describes the situation where more group capital enhances farmers’ ability to
purchase more cattle. Increasing the number of cattle purchased enables the farmers to
increase the number of cattle sold and gain more sales revenue. Increasing sales revenue
Never complain to the farmer group
Annual compensation fee for the surrounding
LEGITIMACY There is no forum or media for the affected to express their interest
Why the affected are
ignored?
Experienced, proven in a real farming situation, available and accessible
Socially respected in the community
Uneconomic transportation cost
Availability of local trader, easier
Lack of cattle-pricing skills
KNOWLEDGE
Farmers only trust the group leader and peer farmers as the source of knowledge and skills.
Feeding issue: selective and partial adoption of feeding strategy developed by the university
Limited marketing channel; farmers were dependent on to local traders.
Why do farmers only trust their
leader and peers?
Why do farmers depend on local
traders?
What caused these issues?
Requires additional cost and time for preparation
Household financial necessity
Grant availability (did not need to repay)
No penalties for poor performance
Household demand for additional income
Low reproductive performance
Fattening has faster financial cycle
MOTIVATION
Large government grant provokes an expectation to gain immediate benefit to the household.
Shifting from government’s recommended breeding to farmers’ preferred fattening, thus income become the primary measure of success
Why do farmers want immediate
benefit?
Why was fattening largely
preferred over breeding?
Leader credited for getting the grant
Member continuously receives incentives
Limited forages cultivation area
Previous experience, price free-falls due to imported cattle
CONTROL
Coerciveness exists; leader dominated but respected
Breeding and feeding issues: shortage of forages during dry season and difficult to determine the quality of a cow for breeding
Market were sensitive to cattle import policy
What caused these issues?
Why is the leader
respected?
Why are markets sensitive to
import?
Breeding record unavailable
105
will further increase the group capital and the reinforcing loop continues. Also some
portion of the sales revenue goes to individual farmer members, thus increasing sales
revenue has a positive linkage to farmer’s income. Additionally, number of cattle
purchased increases the cattle population. Contrarily, number of cattle sold reduces the
cattle population.
Figure 6.5 Basic CLD of smallholder beef farming
However, in the real world, the situation is not so simple. Many variables affect the
behaviour of the beef farming system, particularly in those groups which are recipients of a
government aid program. As explained in the method section, this study aimed to explore
those variables in four dimensions: motivation; control; knowledge; and legitimacy.
6.4.1 Motivation
“Large government grant increases an expectation to gain more income”. As
mandated by the SMD program guideline, both groups directly received a large sum of
money of more than Rp300 million (>$ 30,000), from the central government in Jakarta
into the group account. Discussion with the leaders of both groups revealed that soon
after farmers knew that their group had been selected as a grant recipient, many members
asked when they could get the cash for their household; as reflected in the interview with
the Mugi Lestari leader:
(in Javanesse)...Lha wong artone dereng angsal mawon sampun sami taken
kapan dibageni ngge bungah-bungah... (...Although the group have not
received the grant, the member have started to ask when they would get the
initial share of cash, just a little bit to make their family happy...) (Farmer 2
Group 1)
sales revenuegroup capital
farmers income
number of cattle
purchasednumber of
cattle sold
+
+
+
R1
cattle population
+ -
+
+
106
Farmers tend to secure their livelihood security needs first (Giller et al. 2009). Therefore,
given the fact that the grant did not oblige farmers to repay, farmers admitted that at some
level they were provoked to use some of the grant to satisfy their household needs.
Unfortunately, meeting household needs is a never ending process because income has a
positive relation to expenditure (Sekhampu & Niyimbanira 2013); as income increases,
households will respond by trying to increase their want-satisfaction, in terms of quality
and/or quantity (Nelson & Consoli 2010) and diversity (Simon 2011). Consequently, the
response to receiving a grant is an increase in expectations of income to support them.
This expectation was exacerbated by the availability of cash from the government grant
without any obligation to repay. Thus, they were provoked to use the grant for their
household purposes. Experience from a poorly administered government agricultural
credit program in Lombok, Indonesia (Sjah 2005) also showed a similar situation. Farmers
tended to seek to fulfil their immediate needs first, and thus were easily diverted from
adopting certain practices the development program was designed to foster (Giller et al.
2009).
Farmers believed that the grant would positively increase their income. However, in reality
the income level was lower than expected, and in some cases sales incurred a loss. But,
farmers need to get something in order to maintain their motivation. Discussion with the
group leader reflected this situation;
(in Bahasa Indonesia) Pada awalnya ketika program turun anggota begitu yakin
bahwa program ini akan meningkatkan pendapatan mereka, namun pada
kenyataannya keuntungan jauh dibawah harapan, bahkan kadang rugi. Tapi
anggota tetap diusahakan untuk memperoleh uang untuk mempertahankan
motivasi mereka. Dana diambilkan dari jatah kelompok, jadi ya modal
kelompok berkurang. (Initially, farmers strongly believed that the program would
increase their income; in reality the income is not as expected, sometimes even
suffer from loss. But to maintain their motivation, members keep receiving
some money which has been withdrawn from group capital. Thus, it decreased
the group capital) (Farmer 2 Group 1).
Figure 6.6 combines this situation with the basic CLD diagram in the previous figure. The
diagram highlights another, balancing loop (B1), which describes the increase in expected
107
income widening the gap between expected and actual income and thus triggering action
to reduce the gap by increasing the share for farmers to increase the farmers’ actual
income and closing the gap.
Figure 6.6 Effect of grant to population and income loop
Therefore, on one side, the government grant supports group capital to improve farming
outcomes, and thus accelerates R1 which aims to increase the cattle population and the
farmers’ income. This was shown by a black arrow with positive polarity which connect
government grant to R1 loop. But on the other side the government grant also increases
farmers’ expectation to gain benefit and thus increases the expected income which widens
the gap between expected and actual income and makes farmers allocate more for share
for household purposes (shown by black line with positive polarity which connects the
government grant to B1 loop).
As some of the grant which should be allocated for farming was used for non-farming
purposes, the group assets could not increase as expected. This is shown in Figure 6.6
by the black bold arrow connecting from “share for farmers” to “group capital” with negative
polarity. Consequently, less capital allocated to purchase replacement cattle caused
sales revenuegroup capital
farmers actual
income
number of cattle
purchased
governmentgrant
+
expectedincome
+
+
share forfarmers
+
-
cattle population
number of
cattle sold
-+
+
gap betweenexpected andactual income
+
-
+
+
B1
R1
+
+
108
reduced population growth, and constrains the purpose of the government program to
increase the cattle population.
The diagram shows that the government grant which was designed to purchase new cattle
and thus support cattle population growth has a contrary effect which has potential to
constrain this goal. Without any obligation on recipients to repay, the grant increases their
expectation to gain benefit which is manifested in increasing expected income which leads
to allocating some of the grant to non-agricultural expenses. This means less money is
available for purchasing new cattle, and cattle population growth is constrained.
This also relates to the next problematic situation. The government’s intention in providing
the grants was increasing the national cattle population by focusing on breeding as the
main activity. In contrast, farmers’ main purpose is always to generate income for their
household; therefore they prefer fattening which has a shorter production cycle and
generates cash returns more quickly.
“Shifting from government’s recommended breeding to farmers’ preferred
fattening”. SMD, like many development programs, has never been completely adopted.
As reported elsewhere (Olivier de Sardan 2005), selective adoption and side-tracking
practices commonly occur. Selective adoption refers to the situation in which the target
population will only adopt the certain part of the program which subjectively fits and works
for them. Additionally, side-tracking emphasizes that the reasons for recipients to adopt
the development program are usually different from those motivating program designer
(Olivier de Sardan 2005).
In the case of SMD, the government designed this particular program to boost the national
cattle population as well as to increase farmers’ welfare through strengthening the
breeding performance (DGLVS 2011b). The main goal of breeding is to produce calves
(Boykin et al. 1980), with most female calves retained for use as breeding stock, and
increasing the number of breeding females, whereas males are sold to generate income.
Thus the expectation of the program was that the farmers’ groups would be strengthened,
having more cattle and capital, and thus, become less dependent on government grants in
the future. However, farmers have their own objectives – to increase their income.
Accordingly, farmers adopted certain parts of the program - those which were beneficial for
accomplishing their goals. Farmers saw that the SMD, regardless of its intention, was
109
their opportunity to increase their capital. Therefore, when farmers found that the breeding
performance was low, they shifted into fattening, first by selling non-productive females,
and then by buying young calves or steers and feeding to produce high quality meat (Perry
1992). The causal linkages describing the breeding, and the fattening is visualized in
Figure 6.7 whereas the shifting from breeding to fattening is presented in Figure 6.8.
Figure 6.7 Breeding and fattening loops
The CLD in Figure 6.6 describes the design of the government program to increase the
cattle population and to generate cash for the farmers. Cash from the grant strengthened
the group capital and enabled farmer to buy more cattle, thus increasing the number of
cattle purchased. The purchased cattle should have been allocated mainly to increase the
population of cattle for breeding to produce more calves. Selected female calves were to
be retained for breeding, whereas males were for fattening purposes and could be sold,
thus increasing the number of cattle sold, and generating sales revenue. Therefore, the
government objective to increase cattle population and generate income for farmers could
be achieved.
salesrevenue
groupcapital
farmers actual
income
number of cattle
purchased
government
grant
+
expectedincome
+
+
share for
farmers+
-
cattlepopulation
calves
number of
cattle sold
+
-+
+
cattle for
breeding
+
+
cattle for
fattening
+
+
desiredsales rate
+
gap betweenexpected andactual income+
-
+ B1
R3
R2
B2
+
B3
+
+
110
The engine of growth of this loop diagram is the breeding loop (R2). R2 is a reinforcing
loop showed that more cattle for breeding expectedly produces more calves which further
increases the cattle population. The delay mark reflects the 9 months gestation and 4 – 5
months of weaning period. With the assumption of 50:50 chance of male: female calving
ratio, half of the population goes to fattening and the other half is allocated as breeding
cows. Therefore the number of cattle for breeding increases which further increases the
number of newborn calves, and the cycle continues. The rate of R2 loop is positively
affected by the calving rate. Unfortunately, the fact that the average rate of occurrence of
second calving in all SMD recipient groups was very low (2.89%) (Yuwono & Sodiq 2010)
significantly decreased the speed of the breeding loop (R2) to increase the population.
Additionally, there is another loop involved, the fattening loop (R3). R3 describes a
reinforcing process whereby more sales will generate more cash which can be used to buy
more fattening cattle as reflected by the following variables: number of cattle sold – sales
revenue – group capital – number of cattle purchased –cattle for fattening. The fattening
loop rate is positively affected by the desired sales rate.
The CLD also highlighted that the number of cattle sold negatively affects the cattle
population. This is described in a balancing loop, B2, which explain that an increase in the
number of cattle sold decreases the cattle population. The rate of B2 is positively affected
by the desired sales rate which has a goal to increase the actual income as an effort to
close the gap between expected and actual income as shown by another balancing loop,
B3.
The B3 loop describes an alternative pathway for farmers to increase their income apart
from increasing the share to farmers from group income (as described by B1 loop). B3
shows that increasing gap between the expected and the actual income endorses the
desired sales rate thus increases the number of cattle sold, generates more sales
revenue, earns more profit and results in increasing farmer actual income and closes the
gap between expected and actual income.
As reflected in the conceptual model, the main purpose of beef farming for farmers is to
generate income. Farmers will do whichever activity will yield more profit. In the
interviews with farmers, they all replied with a common answer, arguing that fattening
111
seems preferable because it is able to quickly generate cash. The following response is
typical:
(in local language, Javanese) Pancen si sae-saene nggih nek wonten sing
dipatilaken. Ben medal pedet te. Tapi nate ping kopang kaping dipatilaken
mboten meteng-meteng. Nggih bonyok sing ngempani. Dadine seniki sami
milihe bakalan mawon, ben cepet dados arto. (Ideally, our farming should also
have orientation on breeding so that we can produce calves. Unfortunately, we
have a very bad experience in breeding. After several inseminations, the cows
fail to pregnant. It was a big hit for the farmer, because they have to feed them
every day. Therefore, currently they prefer fattening because it is able to
generate cash immediately) (Farmer 1 of Group 1)
Further, farmers’ argue that since they had received the grant, the reproductive
performance of the cows seriously declined from 1 – 2 to more than four services per
conception. Thus, farmers have to wait much longer to produce calves, but still have to
provide adequate cut-and-carry feed every day to their unproductive cows. This incurred
extra cost because of the cost of extra inseminations, with farmers need to pay Rp50.000
– 100.000 (AUD $ 5 – 10) per insemination. In contrast, fattening has a shorter production
cycle, and is much more attractive and lucrative. Generally, a fattening operation varies
from 150 – 180 days (Hadi et al. 2002) from purchase to resale. However, almost 50% of
these farmers prefer a shorter period, ranging between 100 – 150 days, so that they can
perform three sales in a year, in order to increase their income as described in B3 loop.
This imperative drove farmers to allocate more of their resources to increasing the number
of cattle for fattening purposes.
The problem was aggravated by farmers’ refusal to continue to receive the large-framed
Brahman-cross cows imported from Australia for distribution through the program. These
cows were pregnant when received, and were well regarded initially, but after calving their
subsequent reproductive performance in Southern Central Java was very poor (Yuwono &
Sodiq 2010). Therefore farmers preferred to switch to conducting fattening rather than
breeding operations. An interview with one of the group leaders indicated that poor
reproductive performance is the major reason why they were shifting from breeding to
fattening.
112
“...sebenarnya, kalau sapi yang diberikan gampang dibuntingi kami senang-
senang saja untuk terus memelihara betina bibit.. (..actually, we were happy to
do the breeding scheme as long as the cows could be pregnant easily..”)
(Farmer 1 of Group 2)
Figure 6.8 visualizes the situation where low calving rate reduces farmers’ preferences to
breeding to avoid losses, and shifts to fattening. As a result, the R3 and B2 loops are
accelerated. Even when farmers have female calves, they would rather raise and sell the
heifers than keep them as breeding cows. The cash will be used to buy a smaller steer as
a replacement, to be fattened again, while the profit goes to the household. The
implication is that the cattle population may not be increased, but as the number of sales
increase, so does the income.
Figure 6.8 Motivation loops
As more resources are allocated for fattening, availability of resources left for breeding will
decrease because fattening and breeding compete for resources. As a result, cattle for
breeding decrease and the R2 loop become a vicious cycle of declining breeding activities.
In the real world, all systems are regarded as purposeful (Ulrich & Reynolds 2010). All
loops in the motivation dimension mentioned above are flowing purposefully to achieve
sales revenuegroup capital
farmers actual
income
number of cattle
purchased
government grant
+
expected income
+
+
share for farmers+
-
cattle population
calves
number of
cattle sold
+
calving rate
+
-+
+
cattle for breeding
+
+
cattle for fattening+
+
desired sales rate
+
gap between expected
and actual income+
-
+ B1
R3
R2
B2
+B3
preference to
breeding
-
+
+
+
113
two goals; to increase cattle population and to generate income. Yet, currently it seems
that farmers have more concerns about income than with increasing the population. The
next section will discuss the source of control within a smallholder beef farming system
which drives the above mentioned motivation in pursuing those two goals.
6.4.2 Motivation and Control
Coerciveness exists; leader dominant but respected. Group leaders are appointed by
their members annually in a group meeting and can be re-elected. However, in both
groups the group leader had not been changed since they received the grant. Interviews
with members highlight two reasons why the leaders were respected and thus re-elected.
Firstly, they were considered to have made a significant contribution in obtaining the
government grant, and secondly, they were able to manage the group resources and
provide cash returns to all group members regularly.
In contrast, discussion with both group leaders revealed that they were not entirely keen to
be appointed as group leaders because of all the responsibilities incurred. Externally, as a
program recipient, the leader has to deal with all monitoring processes, and internally, he
is expected to be able to manage the group resources to generate income. However, the
group leader does not receive any additional income for his extra efforts. His share of
profit is the same as others in the group. Although this sharing is not financially beneficial
to the leaders, it does increase members’ trust and respect for their leader.
All group decisions are made at the group meeting which is conducted regularly each
month. Leaders observed that they often need to take a coercive measure in the group
meeting to ensure that a decision is not only beneficial for all members but also supports
group sustainability. For example, when members need to sell cattle, the leader needs to
organise purchase of the replacements as soon as possible. Before purchasing the
replacement cattle, the money allocated for that purpose needs to be transferred to the
group account. Thus the role of the leader is to decide wisely between competing
individual members’ and group interests so that it remains in harmony. This pragmatic type
of leadership is often necessary to minimize group conflict (Kotlyar et al. 2011).
However, sometimes the leader needs to make an exception, particularly when farmers
have suffered from some significant loss. Interviews with leaders in both groups revealed
that in the case when a farmer has suffered from loss, the leader will tend to allocate some
114
extra cash him. They argued that regardless of the result, farmers have already worked,
and therefore, should get something as a reward, even if this means reducing the share
retained for the group, which could lead to a decrease in group capital.
Clearly, the leader has a significant role in ensuring the balance between group and
individual members’ interests. This role can only be achieved if the leader is trusted and
respected by group members (Burke et al. 2007). Trust and group performance are
closely linked in a dynamic process where positive group performance will buffer the trust,
but negative performance will diminish trust (Peterson & Behfar 2003). This situation is
visualized in a causal loop diagram (Figure 6.9).
Figure 6.9 Power control loop diagram
The left side of this loop diagram shows a simplified visualization of the power loop
diagram. It highlights a reinforcing loop (R4). As mentioned, the leader is credited for the
success of the group in receiving the government grant. Therefore government grant
sales revenuegroup capital
farmers actual
income
number of cattle
purchased
governmentgrant
expectedincome
+
+
share for farmers+
-
cattle population
calves
number of
cattle sold
+
calving rate
+
-+
+
cattle for breeding
++
cattle for fattening+
+
desiredsales rate
+
gap between expected
and actual income+
-
+ B1
R3
R2
B2
+
B3
preference to
breeding
-
+
leaderpower
member trust
+
share forgroups
+
+
+
-
R4
+
+
+
leader power
membertrust
+
share for groups
farmers actual
income
+
+
+
group capital
farm size
+
+
R4
115
increases leader power. With this power, the leader is able to ensure the allocation of
cash for the group, thus increasing the group capital which induces R3 loop.
Subsequently this increases the farmers actual income, closes the gap between expected
and actual income, and increases the member trust which will further strengthen leader
power.
Within this power loop, the important part is how to maintain the members’ trust so that
they obey the leader decision to allocate some of the revenue back to the group. Trust will
be buffered as long as the group performs well and generates income for its members.
However, if farmers fail to receive income, a loss of trust will occur and the R4 loop
become a vicious cycle. In the situation of smallholder groups, leader power needs to be
maintained for continued group function.
Feeding issues: shortage of forage during dry season. As ruminants, cattle require
forage for their diet. Both groups in this study fully adopt a cut-and-carry system in which
cattle are always kept in the cattle house, and farmers cut forage and carry it to them.
Forage is harvested mainly from the group forage cultivation area, nearby forest fringes, or
river bank verges.
The most common cultivated forage in the area is Pennisetum purpureum, also known as
elephant grass or Napier grass. Generally, growing cattle require a minimum daily dry
matter intake of 1.8 – 2% of body weight (Hersom 2013). Therefore a 300 kg animal will
need 5.4 – 6 kg of dry matter intake per day. If fed on elephant grass from the cultivation
area, with a dry matter content of 20 – 25% (Yunus et al. 2000), this equates to 21 – 30 kg
of fresh grass per head per day. With a limited cultivation area, farmers are often not able
to provide that amount of grass despite application of manure fertiliser to the forage area.
Therefore they commonly mix the elephant grass with other feed sources including local
native grass, rice straw and/or corn straw.
In the case of Sari Widodo, they have 0.3 hectares of elephant grass area divided equally
among members. Interviews with farmers revealed that with the current land area and
cattle population of 2 – 3 cattle per farmer, they did not have any problem of forage
availability during rainy season, but during the dry season forage become their main
problem. Further discussion exposed one possible reason why their cattle population
remains unchanged for years.
116
Kalau melihara 2 – 3 ekor, masih ngga ada masalah hijauan. Kalaupun musim
kering, masih bisa dikejar nambah jerami. Tapi saya pernah punya 5 ekor,
setengah mati cari rumputnya. Kapok saya. Paling-paling maksimal 4 ekor.
Itupun masih susah ketika musim kering. (With 2 – 3 cattle, forage is not a
problem. We still could add more rice straw to partially substitute the forage.
But, I had experience raising 5 cattle at once; it was very difficult to sufficiently
provide the forage. I certainly will not do that again. Maximum of four cattle is
enough. Nonetheless, it remains a challenge during dry season). (Farmer 2
Group 2)
Figure 6.10 portrays the situation where forage become one of the constraints to
increasing the cattle population.
Figure 6.10 Forage loop
Figure 6.10 described in one balancing loop (B4) which shows that increasing cattle
population means more cattle need to be fed; thereby increasing the total forage
consumption which diminishes forage available per head. Consequently, the carrying
+
-
+
+
forage available
per head
total forage
consumption
-
B4
sales revenuegroup capital
farmers actual
income
number of cattle
purchased
governmentgrant
expectedincome
+
+
share for farmers +
-
cattle population
calves
number of cattle
sold
+
calving rate
-+
+
cattle forbreeding
+
+
cattle for fattening
+
+
desiredsales rate
+
gap between expected
and actual income
+
-
+B1
R3
R2
B2
+
B3
preference to
breeding
leaderpower
member trust
+
share for groups
+
+
+
-
R4
+
forages cultivation
area
manure
+
labor +
+
+
forage production +
+
+
forage consumption
per headfeeding skills-
+
117
capacity decreases and suppresses the number of cattle purchased and reduces the cattle
population.
Breeding issue: difficulty in determining the quality of a cow for breeding. The
quality of the cows is one important component which supports breeding efficiency. The
idea is to reduce the unproductive periods in the reproductive life of the female (Burns et
al. 2010). In addition to providing adequate forage, this includes selecting good heifers or
cows. For breeding purposes, farmers should carefully evaluate the body conformation,
the performance records, and if necessary the history and genetic background such as the
production history of their mothers and the sires (Thomas 2010).
However, such records are mostly unavailable in this context. When selecting heifers or
cows, farmers rely only on body conformation. A slim angular body with a long, narrow
head and neck, and a good udder is preferred. Often, farmers prefer to buy a calved cow
– a cow with a pre-weaned calf, to ensure that the cow is able to become pregnant. But
without the performance record, it is difficult to accurately determine the quality of a heifer
or cow for breeding purposes.
In the first SMD batch of 2008, farmers believed they had selected the best females for
breeding, but in reality they had a poor reproductive performance; long calving interval and
low pregnancy rate. This reproductive inefficiency had significant economic consequences
(Burns et al. 2010), and farmers suffered financial losses and started to shift to cattle
fattening..
The poor breeding performance and its impact on the system behaviour is shown in Figure
6.11. The absence of recording decreases the ability to select quality cows which
contributes to prolonging the calving interval, thus decreasing calving rate. Low calving
rate discourages preference to breeding thus negatively affects the R2 loop and increases
the number of farmers who shift from breeding to fattening. As the R2 loop rate
decreases, the cattle population growth decreases as well.
118
Figure 6.11 Quality cows linkages to breeding loop
Market is sensitive to cattle import policy. Farmers had a bitter experience in
2009/2010 when the cattle price dropped. Traders, both local and interstate, mentioned
that in 2010 the cattle price drop ranged from Rp400,000.00 to 1,000,000.00 per animal.
Traders argued that at that time, supply of imported cattle to the local market was
abundant, and imposed a depressing effect on market prices for local cattle.
Moreover, discussion with local butchers revealed that in 2010, they preferred to buy and
slaughter imported cattle, not only because it was cheaper but also because the butcher
was given a grace period of 30 days for payment. Additional benefits accrued because
the price was calculated based on the carcass produced, not on the live weight of the
cattle. This gave advantages for the butcher because he did not need to predict how
much carcass weight would be produced from certain live cattle, and it also minimized risk
+
-
+
+
+
+
B4
sales revenuegroup capital
farmers actual
income
number of cattle
purchased
governmentgrant
expectedincome
+
+
share for farmers +
-
cattle population
calves
number of cattle
sold
+
calving rate
-+
+
cattle forbreeding
+
+
cattle for fattening
+
+
desiredsales rate
+
gap between expected
and actual income+
-
+B1
R3
R2
B2
+
B3
preference to
breeding
leaderpower
member trust
+
share for groups
+
+
+
-
R4
manure
+
ability to select
quality cows
recording
+
+
total forages
consumption
forage available
per head
forages cultivation
area
labor +
forage production
+
+
forage consumption
per head
feeding skills
-
-
+
+
119
of loss in the abattoir due to common meat-stealing practices during slaughtering and
dressing.
The price had relatively small fluctuations during 2011. The government policy to slash
the cattle import quota for 2012 significantly reduced the supply of imported cattle. As a
result, cattle price increased up to Rp26,000.00 – 27,000.00 per kg live weight. Then, in
July 2013 the government of Indonesia revised its import policy and increased the live
cattle imports quota from Australia. Soon after the news was aired, the price was
corrected, to a quite dramatic extent, as the price fell at a time it traditionally rises, during
the Idul Fitri celebration. This is one of two peak seasons each year when cattle price
usually peak. But, in August 2013 when most Indonesian celebrating were Idul Fitri, the
cattle price decreased by an average of Rp2,000.00 per kg live weight. This indicate that
the cattle price is sensitive to import policy, even when the imported cattle have not yet
arrived. The market was still traumatized by the bitter experience in 2010.
In response to the decreasing cattle price in 2010, many farmers preferred to fatten
females to minimize the risk. Female cattle are cheaper than male. On average, male
price ranged from Rp26,000.00 – 27,000.00 per kg live weight whereas female ranged
from Rp21,000.00 – 22,000.00 per kg live weight. This was a risk reduction strategy, such
that in case the government increased the cattle import quota and the price dropped again,
farmers would not suffer such a significant loss.
Figure 6.12 describes how imports have effects on the system. On one side, imports
increase farmers’ preferences to fatten females as a response to minimize risk. On the
other side, imports decrease market prices, thus lessening sales revenue. These effects
impact on the official system purposes which are to increase both the cattle population and
farmers’ incomes. Increasing allocation of females for fattening and slaughter reduces the
proportion of cattle for breeding. As this happens, the R2 loop is negatively affected which
results in smaller cattle population. Moreover, as cattle price decreases, so does sales
revenue. This also negatively affects the R3 loop which results in less cattle population. If
the price is significantly reduced, it might decrease farmers’ actual income thus
decelerating the R4 loop which ends up decreasing group capital, cattle population, and
farmers’ income.
120
Figure 6.12 Market sensitivity diagram
This section has discussed three aspects related to the dimension of control of the
smallholder beef farming system in both farmers’ groups and how these aspects
contributed to shaping the behaviour of the system. The first is the decision making which
is dominated by the leader. Then, breeding and feeding issues which affect the resources
which limit the cattle population growth. Lastly, price sensitivity to import policy changes
and farmers’ dependency on granted funds become part of the uncontrollable environment
which potentially influences the system purposes.
Those power control, resource, and environment issues need to be appropriately managed
to ensure the purposes of the system can be achieved, or at least the directionality of the
group is moving forward to pursue its purposes. To do so requires skills and knowledge
whose linkages will be further discussed in the next section.
total forages
consumption
B4
sales revenuegroup capital
farmers actual
income
number of cattle
purchased
governmentgrant
expectedincome
+
+
share for farmers+
-
cattle population
calves
number of cattle
sold
+
calving rate
+
-+
+
cattle forbreeding
+
+
cattle for fattening
+
+
desiredsales rate
+
gap between expected
and actual income+
-
+
B1
R3
R2
B2
+
B3
preference to
breeding
-
+
leaderpower
member trust
+
share for groups
+
+
+
-
R4
+
manure
+
cattle price
import
-
proportion of
female fattened
+
-
+
+ ability to select
quality cows
recording
+
+
+
+
-
forage available
per head
forages cultivation
area
labor +
forage production
+
+
forage consumption
per head
feeding skills-
-
+
121
6.4.3 Motivation, Control and Knowledge
Farmers only trust the group leader and peer farmers as the source of knowledge
and skills. Two major reasons for farmers to trust an expert as their source of knowledge
and skills are their proven experiences in a real farming situation and ready availability for
consultation. For those reasons, both groups rely on their leader and their peer farmers as
the main source of knowledge and skills. Although farmers are aware that much
knowledge about new technologies is available from staff at the university or extension
service office, those actors are less preferred by the farmers as the source of knowledge
and skills; not only because farmers are reluctant to go there but also because
researchers or extension service officers may not be available at the time when farmers
require assistance. Similarly, graduates are also less preferred as they are regarded as
lacking experience in real farming although being rich in theoretical knowledge.
Consequently, an experienced leader is likely to gain more respect and trust from group
members, particularly if living in the neighbourhood and readily accessible. Therefore, as
the expert in whom farmers place most trust, their group leader’s knowledge and skills
have a positive link to farmers’ knowledge and skill, as presented in Figure 6.13.
Figure 6.13 Leader’s skills and knowledge link
forage available
per head
total forage
consumption
-
B4
sales revenue
group capital
farmers actual
income
number of cattle
purchased
governmentgrant
expectedincome
+
+
share for farmers +
cattle population
calves
number of
cattle sold
+
calving rate
+
-+
+
cattle forbreeding
+
+
cattle for fattening
+
+
desiredsales rate
+
gap between expected
and actual income
+
-
+B1
R3
R2
B2
+B3
preference to
breeding
-
+
leaderpower
member trust
+
share forgroups+
+
+
-
R4
+
forages cultivation
area
cattle sale price
import
-
proportion of
female fattened
+
-
-
+
recording
ability to select
quality cows+ +
labor+
feeding skills+
leader skills
farmers skills
+
+
+
+
R1
-+
forage production
+
+
forage consumption
per head
-+
122
The main operational costs of smallholder beef farming are dominated by the cost of
purchased cattle and the cost of feed (Hadi & Ilham 2002). Therefore knowledge and
skills to manage these two costs are critical to the success of beef farming. Based on the
conceptual models, issues related to farming skills were focused on feeding and pricing
skills.
Feeding issue: selective and partial adoption of feeding strategy developed by the
university. Common feedstuffs used in both groups were fresh grass, fresh rice straw,
and fresh corn straw, when available. Occasionally, farmers also add feed supplements,
whenever available. These include rice bran, tapioca waste, and tofu waste. Farmers use
their experience to estimate the feed sufficiency per cattle, and provide roughly one bundle
of grass or rice straw, weighing 30 kg on average, per animal per day. Frequently, the
grass varieties are mixed, although mostly dominated by elephant grass (Pennisetum
purpureum). Additionally, feed supplements are occasionally provided, whenever
available, in quantities based on the farmer’s estimation, typically influenced strongly by
the availability and price of the supplement.
At the beginning of the SMD program, the university provided a set of feed formulation
guides for farmers. However, it had never been fully adopted by them. The feed
formulation was based on meeting the nutritional requirements of cattle. It used less fresh
forage, which has always been limited, and maximized ammoniated rice straw which is
more readily available. The purpose was to overcome the limitation of grass to feed the
growing population. However, it requires additional treatment and time for the
ammonization process. In addition, some feed supplements should be provided. Several
scenario formulations were introduced to the farmers to anticipate price fluctuations of
each feedstuff.
However, feed prices are typically very volatile, and farmers find it difficult to adjust. The
nature of their reluctance is based in avoiding extra cost for feed. As a consequence, they
choose to adopt in the most convenient and least cost way; they only use the feed stuffs
which are readily available and choose the cheapest feedstuffs, even free if possible,
without much concern about the nutrient sufficiency of the ration provided. Practically,
many of them prefer to give more forage and roughage and avoid expensive supplements.
They argue that they still have enough energy to collect forage for their 1 – 3 cattle, but
admit that they have difficulties to feed more than 3 cattle.
123
Figure 6.14 describes how feeding skills enable farmers to deal with the forage shortage
issue. Skilled farmers should be able to formulate feed so that it requires less fresh forage
and maximises a more abundant source of feed, rice straw. This was described by a
negative link from feeding skills into forage consumption. More feeding skills decreases
forage consumption thus increase forage availability and carrying capacity. Consequently,
skilled farmers would be able to keep more cattle than average farmers.
Figure 6.14 Feeding skills diagram
Limited marketing channels; farmers dependent on local traders. Section 5.4.3 and
5.4.4 discussed the limitations in marketing options for farmers. Farmers lack ready
access to interstate traders, and common meat-stealing practices in the slaughterhouse
during slaughtering and dressing discourage farmers from selling their cattle directly to the
butcher. There are several obstacles to selling directly to interstate traders. First,
interstate traders mainly supply large companies with strict minimum weight criteria, which
forage available
per head
total forage
consumption
-
B4
sales revenue
group capital
farmers actual
income
number of cattle
purchased
governmentgrant
expectedincome
+
+
share for farmers +
cattle population
calves
number of
cattle sold
+
calving rate
+
-+
+
cattle forbreeding
+
+
cattle for fattening
+
+
desiredsales rate
+
gap between expected
and actual income
+
-
+B1
R3
R2
B2
+B3
preference to
breeding
-
+
leaderpower
member trust
+
share forgroups+
+
+
-
R4
+
forages cultivation
area
cattle sale price
import
-
proportion of
female fattened
+
-
-
+
recording
ability to select
quality cows+ +
labor+
feeding skills+
leader skills
farmers skills
+
+
+
+
+
R1
-
+forage production
+
+
forage consumption
per head
-
+
124
disqualifies many farmers. Furthermore, interstate traders only buy male cattle, whereas
many farmers also sell female cattle. Lastly, interstate traders only operate at certain
market locations; thus farmers need to transport their cattle to the market which incurs
additional cost, and for smallholders, with only one or two cattle to sell, is very inefficient.
In contrast, local traders are always available to buy farmers’ cattle, and for that reason,
farmers prefer to sell their cattle to them. Frequently, local traders also offer farmers the
service of choosing and buying the replacement cattle from the traders’ stock yard. All the
prices include the handling and transport cost which makes everything easier for the
farmers. All the above-mentioned reasons make farmers dependent on local traders to sell
and purchase cattle.
Figure 6.15 Animal assessment skills diagram
forage availableper head
total forageconsumption
-
B4
sales revenue
group capital
farmers actualincome
number of cattlepurchased
governmentgrant
expectedincome
+
+
share forfarmers
+
cattlepopulation
calves
number ofcattle sold
+
calving rate
+
-+
+
cattle forbreeding+
+
cattle forfattening
+
+
desired salesrate
+
gap between expectedand actual income
+
-
+ B1
R3
R2
B2
+B3
preference tobreeding
-
+
leader power
member trust
+
share forgroups
+
+
+
-
R4
+
manure
+
foragescultivation area
cattle sale price
import
-
proportion offemale fattened
+
-
-
+
recording
ability to selectquality cows
+ +
labor
+
feeding skills
animalassessment skills
+
leader skillsfarmers skills
+
+
+
+
+
+
+
cattle purchaseprice
-
-
R1
-
+
forageproduction
+
+
forage consumptionper head
-
+
125
The problem with this practice is the absence of a measurement scale. Commonly, cattle
prices are negotiated based on an estimation of body weight, and traders have much more
ability to accurately predict the body weight than farmers. This inability to accurately
estimate cattle weight may often result in under-priced selling and/or overpriced
purchasing. Figure 6.15 depicts how the lack of animal-assessment skills slows down the
rate of R3 loop in two ways; under-priced selling reduces sales revenue and overpriced
purchasing reduces the number of cattle purchased.
6.4.4 Motivation, Control, Knowledge, and Legitimacy
There is no forum or media for the affected to express their interest. The affected
refers to households who lived close to the cattle housing. They were not the members of
the group, and thus had never been involved in any farmer group decisions, although they
were affected by the group’s activities. The problematic situation related to the dimension
of legitimacy was the absence of a forum or media for the affected to express their
interests and concerns. Leaders from both groups argue that such a forum was not a
priority for the moment, because the affected never complained about the farming. Both
leaders mentioned that their groups gave a compensation fee to the households living in
the area surrounding the cattle housing. Figure 6.16 shows the situation where more
compensation is required when the cattle population increases.
Figure 6.16 shows a balancing loop (B5) that describes how the increasing cattle
population produces more wastes and manure. Wastes and raw manures induce air
pollution. In order to minimize conflict, the compensation fee needs to be increased when
cattle numbers housed increase, which further reduces group capital, consequently
reduces the ability of farmers to increase the number of cattle purchased, and finally
reduces the cattle population. The key message of this loop is that more compensation
fee is required as the population increases.
All the above mentioned loops describe the linkages among variables in the smallholder
beef farming system which have potency to induce problematic situations. The CLDs are
completely depicted in Figure 6.17. These map the feedback loops of the 4 dimensional
situation of the smallholder beef system: motivation, control, knowledge, and legitimacy. It
has a total of nine loops; four reinforcing and five balancing loops. These loops influence
the behaviour of the system. The next step was to identify the system archetypes, generic
126
systems structures describing the common dynamic processes which characterize the
behavior of the system (Sterman 2000; Maani & Cavana 2007). System archetypes
provide a more simple insight to see the systems structures. Often, analysing system
archetypes can assist in identifing system leverage points (Senge 2006); the places where
an intervention should have the most influence on systems behavior (Maani & Cavana
2007).
Figure 6.16 Pollution loops
Section 3.4 mentioned how the leverage points can be best reached by conducting open
discussion with the group, after all parties are aware of and understand the implications of
the intervention to the feedback structure within the embedded system (Sterman 2000).
Thus, the system archetypes were also required as an essential subject for further
discussion with the farmers and other actors previously involved in this study.
forage availableper head
total forageconsumption
-
B4
sales revenue
group capital
farmers actualincome
number of cattlepurchased
governmentgrant
expectedincome
+
+
share forfarmers
+
cattlepopulation
calves
number ofcattle sold
+
calving rate
+
-+
+
cattle forbreeding
+
+
cattle forfattening
+
+
desired salesrate
+
gap between expectedand actual income
+
-
+ B1
R3
R2
B2
+B3
preference tobreeding
-
+
leader power
member trust
+
share forgroups
+
+
+
-
R4
+
manure
+
foragescultivation area
cattle sale price
import
-
proportion offemale fattened
+
-
-
+
recording
ability to selectquality cows
+ +
labor
+
feeding skills
animalassessment skills
+
leader skillsfarmers skills+
+
+
+
+
+
+
cattle purchaseprice
-
-
pollution
compensationfee
+
+
-
B5
R1
-
+forageproduction
+
+
forage consumptionper head
-
+
127
Figure 6.17 Causal Loop Diagrams of the smallholder beef farming
6.5 Identification of Systems Archetypes
Analysing system archetypes can assist in the identification of system leverage points
(Senge 2006) as a reference to generate strategies to improve the system. Nine systems
archetypes are typically identified (Senge 2006): Balancing Process with Delay, Limits to
Growth (Limits to Success); Shifting the Burden; Eroding Goals; Escalation; Success to
the Successful; Tragedy of the Commons; Fixes that Fail; and Growth and
Underinvestment. Of these archetypes, four were identified: limits to growth, shifting the
burden, success to successful, and fixes that fail.
forage availableper head
total forageconsumption
-
B4
sales revenue
group capital
farmers actualincome
number of cattlepurchased
governmentgrant
expectedincome
+
+
share forfarmers
+
cattlepopulation
calves
number ofcattle sold
+
calving rate
+
-+
+
cattle forbreeding
+
+
cattle forfattening
+
+
desired salesrate
+
gap between expectedand actual income
+
-
+ B1
R3
R2
B2
+B3
preference tobreeding
-
+
leader power
member trust
+
share forgroups
+
+
+
-
R4
+
manure
+
foragescultivation area
cattle sale price
import
-
proportion offemale fattened
+
-
-
+
recording
ability to selectquality cows
+ +
labor
+
feeding skills
animalassessment skills
+
leader skillsfarmers skills+
+
+
+
+
+
+
cattle purchaseprice
-
-
pollution
compensationfee
+
+
-
B5
R1
-
+forageproduction
+
+
forage consumptionper head
-
+
128
6.5.1 Limit to Growth
The limit to growth archetype describes a process in which a period of accelerating growth
is followed by a period of deceleration (Senge 2006). Two problematic situations were
identified to have this archetype: feed availability and number of sales.
6.5.1.1 Feed Availability
As mentioned in Section 2.2.4, the grand design of the Graduates Support Farmers
program was to support national beef sufficiency. Thus, it was practically focused on
increasing the cattle population. As mandated by the GSF program, the grants received
by farmer groups should be proportionally allocated for breeding purposes. More cows
allocated for breeding purposes should mean more newborn calves are produced, thus
increasing the cattle population. Increased cattle population provides opportunities for
farmers to allocate more cows to breeding purposes, and the loop repeats as a reinforcing
cycle (R loop in Figure 6.18). This breeding operation was intended as the engine of
growth of the cattle population. However, this loop has an opposite balancing loop. As the
population increases, so does their forage consumption. In a ‘cut and carry’ zero grazing
situation, without any supporting intervention to increase feed availability, breeding
success will be jeopardized.
Figure 6.18 Feed Availability; Limit to Growth Archetype
The key leverage point to this archetype is to find an intervention which relaxes or
removes the constraint (Maani & Cavana 2007). Therefore, strategies to increase the
availability of feed become one alternative issue to be discussed with the farmers.
Currently, both groups have insufficient forage area. Allocating more land for forage is not
a solution due to the limited land ownership per person. Some alternatives strategies are
as follows.
cow for
breeding
cattle
populationforages
availability
+
+
-
+
R B
forages cultivation
area
+
129
1. Planting high quality grass in the near-by forest margins and river banks to increase
fodder availability. However, conflict of interest with other non-member farmers
should be considered.
2. Applying feed preservation technologies such as ammonisation and ensilage to
overcome the forage shortage during the dry season.
3. Exchanging compost for cattle feed. Compost can be produced from manures and
other non-edible by-products, and exchanged for rice bran or other edible
agricultural side products with other farmers, or sold to buy feed.
4. Ensuring program funds are allocated as intended. Group leaders could advise
farmers about allocating profit to feed purchases rather private expenses.
6.5.1.2 Number of Sales
As previously mentioned, breeding produces calves which increases the cattle population.
This reinforcing loop is the engine of cattle population growth. However, it has a balancing
loop which limits growth: the number of cattle sold (Figure 6.19). Farmers need to sell
their cattle in order to earn income. Moreover, the number of cattle sold is positively
affected by the expected income from beef farming. Within a government program in
which subsistence farmers have effectively received cattle provided as a gift, they have a
natural tendency to seek to convert this gift into cash as soon as possible, for allocation to
numerous pressing farm and household needs. They therefore perceive the program as a
one-off unexpected source of funds to be exploited quickly, rather than as the basis for a
long term increase in productive capacity and cash flow. Many of the cattle purchased,
including breeding cows, are sold soon after arrival. As a result, sales rate exceeds the
calving rate, with the unintended and perverse outcome of a reduced rather than
increasing cattle population.
Figure 6.19 Number of Sales; Limit to Growth Archetype
cow for breeding cattle population number of cattle
sold
+
+
+
-
R B
expected income
+
130
As the key leverage points of this archetype are to remove or reduce the constraints that
limit the growth (Maani & Cavana 2007), the strategy focus could be on imposing limits to
the number of cattle sold, or reducing the expected beef farming income, or on both.
However, as shown by B3 loop the CLD in Figure 6.17, reducing the number of cattle sold
will lead to decreased farmers’ actual income, increase the desired sales rate and
encourage farmer to sell more cattle. The proposed strategy for this situation is to provide
education about herd replacement strategies. This includes improving farmers’ awareness
that with the current practices their farming will not be sustainable. Within their groups
farmers need to be assisted to develop processes whereby they wisely allocate the sales
cash revenue so that households receive cash inflow, and while also ensuring sufficient
remaining cash to purchase replacement cattle. This strategy is proposed to maintain the
desired sales rate in a sustainable level.
Additionally, the CLD shows that the government grant, unaccompanied by repayment
obligation, increases farmers’ expected income from beef farming which will incite the B3
loop. Experience from the disbanded group showed that once farmers received cash from
sale of cattle provided through the government program, it would be very difficult to
persuade them to allocate an appropriate portion to purchasing replacements.
In future, subsidized agricultural credit would be preferable as an alternative source of
funding. However, although subsidised credit has strength in providing cheaper credit, it
has weaknesses to invite misuse of credit (Sjah 2005). To mitigate the weaknesses, the
amount of credit should be carefully measured to match the farm’s need, the distribution
should be complemented by a clear single interpretation that credit has to be returned, the
monitoring should be upheld regarding its distribution, allocation and repayment collection
of the loans, the repayment option should be flexible by accepting non-cash repayment,
and the clients responsibility should be improved through education and extension service
(Sjah 2005).
6.5.2 Shifting the Burden
The shifting the burden archetype represents a situation where people tend to apply an
easy fix, rather than a more fundamental solution. Unfortunately, the easy fix has only
temporary benefits, but results in altering the symptoms and leaving the real problem
untouched and even worsening. Often, the easy fix has side effects which exacerbate the
131
real problem (Senge 2006). Three shifting the burden archetypes were identified within
the CLD of the beef farming system: demand for income, need to improve cattle
population, and pollution problem.
6.5.2.1 Demand for Income
There is a tendency for people to fulfil their basic needs using the most convenient
alternative (Giller et al. 2009). Thus, as perceived household necessity increased with
available farm cash inflow, farmers tended to allocate a disproportionate share to their
household expenses. This allocation was determined by their household demand, rather
than in proportion to the benefit or loss from the sales. This brought consequences of
decreasing the share of income allocated back to farm inputs (Figure 6.20).
Figure 6.20 Demand for Income Shifting the Burden Archetype
Figure 6.20 described the gap between expected and actual income represent the demand
for income. The easy fix to address this gap was by allocating a greater share of group
income for farmer members; thereby closing the gap. However, this easy fix came with
the negative consequences of reduced income share retained by the group, with
associated impact on reducing beef productivity.
A more long-lasting and effective solution could be created by improving farming
productivity to generate income. However, this would take time to take effect, and would
be made more difficult to accomplish once the pattern of increased income allocation to
household expenses was established. To achieve leverage of this archetype, the
fundamental loop should be strengthened, and the ‘easy fix’ loop weakened (Senge 2006).
share for farmers
gap between expected
and actual income
farm productivity
share for groups
-
+
+
-
-
+
B
B
R
132
The group leader, as the manager of the group farming system, plays a crucial role in
sharing a long term vision for farming activities and also in upholding disciplined allocation
of cash sharing between household and farm.
In addition, the B1 loop in the CLD (Figure 6.17) showed that share for farmers could be
lowered by increasing farmers’ actual income. Listed below are two common practices
which should be avoided, together with possible solutions with potential to increase
income from beef production.
1. Farmers tend to select “good-looking” rather than “lean-but-healthy” when they
purchase cattle for fattening purposes. This practice often leads into overpriced
purchasing because most of the pricing is based on the physical appearance such
as coat colour or shape of horns, rather than body weight. Thus, introducing a fair
trade based on body weight could be proposed as one intervention strategy.
2. Farmers are lured into quick sales below market value by the promise of cash
transactions. Despite being aware of the undervaluation, farmers often agree to sell
their cattle once they “feel” the cash in their hand. A mobile banking unit is
available in the livestock market. Encouraging farmers to use the mobile banking
could also be proposed as another intervention strategy.
Intervention could be aimed at helping farmers control their allocation of income to farming
versus household expenditures, seen as share for farmers in the CLD (Figure 6.17).
Improving farmers’ skill in whole-farm and household budgeting would be an appropriate
strategy. Whole-farm budgeting would help farmers to reasonably allocate resources and
set a sensible earning target for each activity.
Additionally, to weaken the demand for income from beef farming activity, other income
generating activities should be encouraged. Beside the main activity in rice cultivation,
almost 30% of the participating farmers’ mixed beef farming with a fish farming, and many
of these were less reliant on beef farming income, and able to set a reasonable earning
target from beef at $0.5 – $1 per animal per day. In contrast, most farmers without fish
farming typically lacked a precise earning target. They needed to maximize earning from
beef for their household, as they lacked alternatives.
133
The setting of reasonable earning targets from its individual member will help the group to
determine a rational portion of group income as the share for farmers. Referring back to
the CLD in Figure 6.17, the ability to control the share for farmers will ensure the group
capital is secured in order to support a more long lasting strategy: increasing the farming
productivity. This could be started by improving farmers’ skill in the area of feeding and
animal assessment skills. Improved feeding skills will ease the CLD’s B4 loop, and thus
increase carrying capacity. Further, enhanced animal assessment skills provide
advantages in cattle pricing because as mentioned earlier the pricing is based mostly on
appearance rather than body weight, conformation and structural soundness. Therefore,
whole-farm budgeting would also be endorsed at the group level to manage the group
capital and allocate resources.
6.5.2.2 Need to Increase Cattle Population
One of the main concerns of the government when implementing the SMD program was to
increase the cattle population (DGLS 2010). Figure 6.21 represents the shifting the
burden archetype related to the issue of increasing the cattle population. The SMD
program was initially able to rapidly increase the cattle population because membership of
this scheme required farmers to purchase cows, thereby treating the symptom rather than
the cause. The more fundamental solution should be aimed at strengthening breeding
performance. However, this strategy would require long and continuous support to take
effect. Moreover, discussion with the farmers and group leaders indicated that large
amounts of cash inflow to the farmer group from the government program, unaccompanied
by any obligation to repay, provoked farmers’ expectation to gain immediate benefit from
the program.
Although the program focus was on breeding, the absence of penalties for groups which
shifted into fattening purposes encouraged others to neglect breeding and change into the
more lucrative fattening option. This situation further suppressed breeding success.
The leverage of this archetype should be focused on strengthening breeding performance.
The CLD in Figure 6.17 showed that ability to select quality cows plays a vital role in
breeding success. Currently, selecting the breeding cow is merely based on its
appearance. Educating farmers on animal assessment to select a good breeding cow is
one strategy to improve the ability to select quality cows thus reinforcing the R2 loop.
134
Figure 6.21 Need to Increase Cattle Population; Shifting the Burden Archetype
6.5.2.3 Pollution Problem
As the number of cattle increased, so did their waste production, creating a potential
source of conflict with the households living close to the cattle housing. To minimize the
conflict, these households received a compensation fee on a yearly basis. However, as
the cattle population increases, the potential for conflict will also increase, and this fee may
need to be increased, with flow-on effects on reducing cash available for other activities
including farmer skills training, for example in waste processing.
In the long term, waste processing such as composting would be a more fundamental
solution to the problem (Figure 6.22) than paying compensation. Therefore, the strategy to
overcome pollution problems should focus on strengthening the management of waste and
allocate resources to improve waste processing skill. Composting is an applicable
strategy on waste management. Compost has a higher price than raw cattle waste; thus a
group compost production strategy has potency to increase group cash inflow. This
strategy will ease the B5 loop of the CLD in Figure 6.17 and promote cattle population
growth.
government grant
need to increase
cattle population
breeding
productivity
preference to
fattening
+
+
-
-
B
B
R
number of cattle
purchased
+
-
expected income
+
preference for shorter
production cycle
+
+
135
Figure 6.22 Pollution Problem Shifting the Burden Archetype
6.5.3 Success to Successful
The success to successful archetype represents a situation when two activities compete
for scarce resources. One activity has relatively greater success than the other, and
consequently gains more support, while the poorer performer receives less support
(Senge 2006). Figure 6.23 depicts the identified success to successful archetype related
to farmers’ preference for fattening rather than breeding.
Based on its main purpose, smallholder beef farming has been categorized into either
breeding or fattening purposes (Hadi et al. 2002). In reality, breeding and fattening are
conducted at the same time, competing for the same resources. A farmer’s preference to
operate fattening or breeding reflects the success to successful archetype. The previous
bitter experience of heavy financial loss from the breeding performance (Sodiq 2011)
discourages farmers from sustaining breeding activities, whereas fattening is able to
provide rapid cash inflow to the group, as well as to the farmer. Thus, farmers
increasingly prefer fattening instead of breeding. Consequently, more resources are
allocated to fattening purposes and fewer to breeding, resulting in more cash generated
from fattening, and fewer calves produced from breeding. If this archetype continues, the
breeding activity of this group will cease as all farmers shift into fattening, and the group
will become fully dependent on external sources for replacement cattle.
The other problem with this situation is the likelihood of overestimating the success of the
fattening. Farmers tended to misjudge short-term cash inflow to their household as an
indicator of success, ignoring the longer term implications.
compensation fee
pollution problem
waste management
waste processing
skills
-
+
+
-
-
+
B
B
R
136
Figure 6.23 Preference to Fattening; Success to Successful Archetype
The recommended strategy to overcome the success to the successful archetype is to
balance the achievement of both choices (Senge 2006). In this case, farmers should
balance the allocation of resources between breeding and fattening. The group leader,
program coordinator, researcher and extension service officer all play vital roles in
educating farmers on farm planning and budgeting. If they focus only on fattening, farmers
will become more dependent on cattle traders and fully exposed to the volatility of cattle
price movements. A dynamic model could be proposed as a learning tool to simulate how
farming would likely behave over time under different resource allocation and production
assumptions.
6.5.4 Fixes that Fail
The fixes that fail archetype describes an intervention which seems to be effective, but in
the long term, has unforeseen consequences which may require even more interventions
(Senge 2006). The SMD program was designed to increase the cattle population as well
as farmers’ welfare. The grant was allocated to buy male cattle for fattening and female
cattle for breeding purposes. Both were designed to increase the cattle population and
generate higher cash inflow for the farmers, enabling them to buy more cattle and
supplement their farming income, thereby becoming less dependent on aid programs (as
shown by B loop in Figure 6.24).
preference to fattening
instead of breeding
resources to
fatteningsuccess of
fattening
success of
breedingresources to
breeding
-
+
-
+
+
+
R
R
137
Figure 6.24 Fixes that Fail Archetype
However, the suddenly increased cash inflow had the unintended result of provoking
perceptions of higher household necessity by farmers (Nelson & Consoli 2010). With more
cash available, more ways of spending it on household needs and wants quickly emerged.
Accordingly, farmers suddenly developed an expectation of meeting needs with additional
income. In order to meet their new perceptions of higher personal and family needs,
farmers could easily be dissuaded from fully adopting the assistance program (Giller et al.,
2009) by allocating a higher share of income to the household rather than to farming
activities of their group. The absence of penalties for other poorly-performed government-
sponsored groups further provoked farmers to reduce the share of income allocated to
farming. Consequently, farmers’ power to buy more cattle decreased, and in stark contrast
to program aims, their dependency on the aid program to sustain their farming activity
increased (as highlighted in R loop, Figure 6.24).
The implication of this situation is that although the aid program has been able to improve
farmers’ total household cash inflow, without groups learning strict discipline, or having it
imposed, to proportionally allocate any extra cash inflow back to farming, dependence on
further aid program assistance will be unavoidable. The leverage point of this archetype is
to focus on the long term. The “quick fix” should only be applied to “buy time” when the
fundamental solution is in progress (Senge 2006). Buying cattle from the aid program is
not a fundamental solution to improve the cattle population. The combination of strategies
mentioned previously offers the best potential to help farmers to focus on the long term.
need to increase
cattle populationgovernment grant
+
-
B
expected income
+
share for groups
-
cattle population+
-
R
penalties
+
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6.6 Chapter Summary
This chapter began with a discussion of the process of unfolding the problematic situations
of smallholder beef farming in Rural Java. Then, application of CATWOE analysis, in
concert with the 12 Questions of CSH and the potential for CSH to enrich the findings, was
systematically described in Section 6.2. The combination of SSM and CSH enabled
structuring the problematic situations of the current smallholder beef farming system in a
more sophisticated and holistic way than was provided by SSM alone (Table 6.3). The
openness of participation during the interviews and the workshops clearly showed the
method’s sensitivity to multiple perspectives. Further, the disparity between the farming
objectives of different participants revealed in this study indicates that the methodology
was also able to embrace the opinions of the less-powerful stakeholders - the farmers.
However, the combination of methods has consequences in that it increased the
complexity of the methodology.
The application of 12 questions of CSH resulted in the list of critiques of the current
compared to the ideal situation of the beef farming (Table 6.4). The list was then
translated into a conceptual model (Figure 6.4) which portrayed the structured problematic
situations. Thus, this answered the first two research question: (1) What is the nature and
complexity of the interrelationships among elements of the smallholder beef farming
system in rural Java? and (2) In view of the documented system element
interrelationships, what are the reasons for the failure of the smallholder beef development
strategy?
Then, Sections 6.4 and 6.5 investigated the linkages among variables related to the
problematic situations. A complex causal loop diagram (Figure 6.17) was constructed to
visualize how those variables were interrelated. Further, as an entry to answer the third
research question, Section 6.5 discussed the identification of system archetypes in which
possible leverage points exist. After all possible archetypes were identified; the next step
should be developing the modelling as the basis to simulate the proposed strategy.
139
Chapter 7. Strategies for Beef Development in Rural Java
The Causal Loop Diagrams (CLDs) which were developed in Chapter 6 described the
qualitative linkages among variables which influence the system behaviour. With the help
of system archetypes and the discussion with the participants, scenarios for improving the
beef farming can be derived. However, it requires more than a CLD to simulate and
examine which of the scenarios is the most suitable strategy to develop beef farming in
Java. System Dynamics (Forrester 1973) provides another tool called dynamic modelling
which is constructed by translating the CLD into a stock and flows diagram (Sterman 2000;
Maani & Cavana 2002, 2007) to develop the dynamic modelling as the basis for scenario
simulation. The component of a stock and flows diagram was discussed earlier in Chapter
3 (also see Figure 3.4). To construct the diagram, this study used iThink software version
9.1.1 developed by the isee systems, inc in the USA using the basic data from Sari
Widodo farmer group. This group was selected as the case study, because of its data
availability and that the group has been involved since the first batch of the SMD program.
This chapter will start by defining the dynamic modelling of the smallholder beef farming,
followed by the scenario modelling, and lastly, strategies for improving the current beef
farming system. Overall, this chapter aims to address the last research question (RQ3);
”How can beef farming productivity in rural Java be improved to enhance smallholder
livelihoods?”
7.1 Dynamic Modelling of the Smallholder Beef Farming
The construction of the dynamic model was developed using a similar process as in the
construction of the CLD. Construction commenced by formulating the motivation module,
followed by control, knowledge, and legitimacy modules. The stock and flows diagrams
were built initially from the first simplest CLD loop, and then more loops were included to
enrich the model. Lastly, a comprehensive four dimensional dynamic model was produced
as the basis for scenario simulation.
7.1.1 One Dimension: Motivation
The modelling started by translating the most basic CLD of the smallholder beef farming
(see Figure 6.5). It has one stock; group capital. The level of group capital is affected by
140
two converters, group revenue and group expenses. Group revenue is an inflow, thus it
increases the group capital. Contrarily, group expenses is an outflow, thus decreasing the
group capital (see Figure 7.1).
The initial value of the group capital was Rp363 million, 90% of which was allocated to
purchase cattle and the other 10% was for operational costs such as feed cost,
transportation, and maintenance. The average cattle purchase price was Rp6.5
million/animal, whereas the selling price was Rp8.25 million/animal. All of the purchased
cattle were sold.
Figure 7.1 Basic stock and flow diagram for smallholder beef farming
The next stock developed was the farmers’ income. The level of this stock was determined
by the inflow of the farmers’ revenue from beef sales and the outflow of the farmers’
expense for their households.
The farmers’ share of revenue from beef sales was regulated by the group so as not to
exceed 10% of the total sales revenue. Additionally, farmers also received a yearly bonus
of up to 50% from the accumulated group capital which has not been used to buy cattle.
On the farmers’ side, they also have expectations, on average expecting to earn at least
Rp5,000.00 per day. However, when the revenue from sales was less than expected,
farmers wanted to increase their income share. In order to accommodate this dynamic
behaviour, the systems dynamic has a tool called the dimensionless multiplier.
The dimensionless multiplier is used to describe any variable forces/quantities which have
the potential to alter the value of another component in the model during the simulation
(Fisher 2007). In this case study, the farmers’ share was affected by the ratio of the actual
group capitalgroup rev enue group expenses
number of cattle sold
selling price
purchase price
number of cattle purchased
proportion f or purchasing cattle
f und av ailable f or cattle
proportion of non
purchasing expenses
non cattle expenses
141
and the expected revenue. Therefore the actual share for farmers is represented by the
variable of share for farmers modified by revenue which is the product of the normal share
for farmers and a dimensionless multiplier called the effect of revenue on share for farmers
(showed by a green-coloured converter in Figure 7.2)
This multiplier is defined as a graphical function with the ratio of allocated farmer revenue
/expected farmers revenue as the horizontal axis. This ratio valued from 0 to 1. The 0
value means no revenue, whereas 1 means the revenue is as expected. The vertical axis
describes the effect of this ratio on the share of sales revenue to farmer. When the ratio is
1 or above, the share to farmers is at a normal level, which is 10%. However, more shares
were allocated for farmers when the ratio is less than 1. These linkages are described in
Figure 7.2 which is a translation of CLD presented in Figure 6.6.
Figure 7.2 Group capital and farmers’ income model
Finally, the third stock was added i.e. the cattle population stock. The SMD program
regulated that farmers’ should have both, breeding and fattening cattle. For that purpose,
one third of the cattle population should have been allocated for breeding. However, this
allocation shifted over time due to the poor reproductive performance of the breeding
cows. Farmers expected that the calving rate should be 1 calf/cow/year. When the
calving rate was lower than the expected, farmers gradually shifted into fattening cattle as
group capitalgroup rev enue group expenses
number of cattle sold
selling price
purchase price
number of cattle purchased
f armers income
proportion f or purchasing cattle
f und av ailable f or cattle
proportion of non
purchasing expenses
non cattle expenses
f armers rev enue
expenses expenses rate
f armers' bonus
share f or f armers
f armers rev enue f rom sales
allocated f armers rev enue
share f or f armers
modif ied by rev enue
sales rev enue
ef f ect of rev enue on
share f or f armers
~
expected f armers rev enue
142
a means of maintaining income. Accommodating this another dimensionless multiplier is
required which called the effect of calving rate on breeding fraction.
This multiplier was developed based on graphical converter of the ratio between expected
calving rate/actual calving rate at the horizontal axis, and the effect of the ratio to the
breeding fraction as the vertical axis. Both have value of 0 to 1. On the horizontal axis,
value 0 means no calving, whereas 1 means calving rate is at the expected level.
Additionally, on the vertical axis, value of 0 means no cattle allocation for breeding,
whereas value 1 refers to the normal allocation of breeding. As discussed with the group,
farmers start to significantly shift the breeding into fattening when cows fail to become
pregnant after four inseminations and stop all attempts at breeding when cows fail to
become pregnant in two years.
Moreover, the dynamics of the cattle population stock is positively affected by calving and
purchasing, and negatively affected by selling. Calving rate is defined as the number of
newborn calves per year. It is a function of the number of breeding cattle in the population
times their calving rate. The purchasing rate is determined by the availability of funds for
cattle purchase and the cattle price. The average fattening time is four months, thus
farmers do the selling and purchasing activities three times per year. Figure 7.3 describes
the translation of CLDs in Figure 6.7 and 6.8 into the stocks and flows diagram which
visualize the dynamic model of the motivation module.
7.1.2 Two Dimensions: Motivation and Control
The control module is developed by elaborating more CLDs under the control dimension
into the motivation module. Firstly, the power control loop diagram (showed in Figure 6.9)
is transformed into the stock and flow diagram. The main message from this loop is that
the share of sales revenue to the group was positively affected by leader power.
143
Figure 7.3 Motivation Model
In this study, leader power is defined as the ability of the leader to determine the allocation
of resources for their farming activities, particularly to ensure that the revenue from sales
goes back to the farmer to purchase replacement cattle. More powerful leaders resulted in
more control to allocate resources, including cash revenues, back to the group.
Additionally, the leader power is positively linked with the farmers’ incomes. When
farmers’ incomes increases, so does their trust in the leader, which strengthens the
leader’s power. In contrast, when farmers fail to earn profit, the leader’s power is
A number of model validation methods have been used (Barlas 1996; Sterman 2000;
Schwaninger & Groesser 2009; Qudrat-Ullah 2012). Each test was designed to serve
different purposes, using different tools and procedures. Essentially, validation
encompasses all stages of the modelling process (Schwaninger & Groesser 2009).
Therefore, this study used three different types of validation in which each type refers to
certain stage of the modelling process.
7.1.5.1 Contextual Validity
Contextual validity deals with the characteristics of the situation in which the model is to be
developed (Schwaninger & Groesser 2009). It relates to the decisions made prior to the
model building process as to whether the dynamic model is the most suitable tool to
represent the real situation. For these purposes, adequacy of methodology test and issue
identification test (Schwaninger & Groesser 2009) were employed in the current study.
Adequacy of Methodology Test
This test inspects whether the dynamic modelling is the best-suited tool to deal with the
situation (Schwaninger & Groesser 2009). Chapter 1 to 3 have shown that smallholder
beef farming in Java is a complex system. It involves a wide variety of actors whose
interest and objectives are varied. To comprehend such a complex system, a
methodology that is able to represent multiple perspectives, and express its causal
linkages as well as its dynamics is required. Therefore, a combination of SD, SSM, and
CSH was employed in this study. SD was chosen for its ability to produce rigorous
dynamic model, SSM for its construct in problem structuring process particularly on its
ability to acknowledge multiple perspectives, whereas CSH is selected for its sensitivity to
power issue which likely occurs in a smallholder situation. Details of the argument for this
combined method have been discussed in Chapter 3, whereas its process in the real world
is described in Chapter 4. The combination of SD, SSM and CSH aimed to ensure that
the methods used in this study could embrace the complexity of the smallholder beef
farming system.
153
Issue Identification Test
This test examines whether the right problems have been identified (Schwaninger &
Groesser 2009). Related to the problem identification, this study had a considerable focus
on harnessing the problem. The first half of the Chapter 6 mainly discussed how the 12
questions of CSH have been able to identify and structure the problematic situation of
smallholder beef farming. The construct allowed smallholders to express their opinion and
further expand their perspectives into four dimensions of motivation, control, knowledge,
and legitimacy. Moreover, their personal opinions were then further discussed in a group
discussion involving multi actors which resulted in a conceptual model of the problematic
situation of developing smallholder beef farming (Figure 6.4). All of these procedures were
employed in an effort to increase the confidence that the model had been built based on
the correct problematic situations.
7.1.5.2 Structural Validity
The essence of structural validity is to ensure that the model is able to sufficiently identify
and represent the causal relationship of the real structure (Schwaninger & Groesser 2009;
Qudrat-Ullah 2012). The following tests have been used for gauging the structural validity
of this study and mainly focused on the process of CLDs building and translation of CLDs
into the stock and flow diagram.
Structure Assessment Test
This test sought to find out if the model is consistent with knowledge about the structure of
a real system (Sterman 2000). All stages of the modelling process contributed to the
structural validity of the model. A series of checks and re-checks have been conducted
since the initial translating of the conceptual problematic situations (Figure 6.4) into the
four dimensional CLDs (Figure 6.16). Once completed, the CLD was then discussed and
refined with the key informants to check its components, linkages and polarities as to
whether it has been able to sufficiently mimic reality. Then, it was followed by a careful
translation of the CLDs into stock and flow diagrams. To minimize the risk of being lost in
translation, the process started from the very simple and basic components of the CLD.
Each translation was carefully checked, to ensure that the equations, polarities, and
linkages of the stock and flow diagrams were able to replicate the CLDs. The translation
was the continued until all the CLDs (Figure 6.16) were transformed into the stock and flow
154
diagram (Figure 7.8). All these procedures were performed to ensure that the model was
structurally sound.
Dimensional Consistency Test
This test examined the unit of measurement for each variable in the model (Sterman
2000). For this purpose, the study used the “check unit” tool of the iThink software and
resulted in no inconsistency of all units within the model. Also, all units, functions and
equations in the model were manually checked for dimensional consistency.
7.1.5.3 Behavioural Validity
Behavioural validity tests were designed to measure how accurate the model could
generate behaviour exhibited in the major behaviours of the real system (Barlas 1996;
Schwaninger & Groesser 2009). At least two components were examined to determine
that the model behaviour is valid; that its ability to mimic the major pattern exhibited by the
real system and its structure has no major error (Barlas, 1989). For this purpose, this
study used the extreme condition test (Sterman, 2000) and the pattern prediction test
(Barlas 1989, 1996).
Extreme condition test
Any model should be able to behave realistically under extreme conditions (Sterman,
2000). Passing this test showed that the model did not have major errors on its structure.
As the reference point, the current base situation of the smallholder beef farming system is
presented in Figure 7.7 which describes how four stocks in the model; breeding, fattening,
group capital, and farmers’ income are dynamically changed. The breeding and fattening
stock represents the number of breeding cows and fattening cattle in the population,
whereas the group capital and farmers’ income stock stand for the revenue earned from
the sales for group and farmers.
With the current value, all stocks are decreasing. The low calving rate provoked farmers to
shift the breeding operation into fattening. In the first 12 months, its figure increased due to
program regulation which specifically mandated farmers to keep their breeding cattle.
However, after 12 months without calving, many breeding cattle were culled into fattening
operations. Then, after two years, all other stocks decreased as well. The revenue from
sales, after deducted for farmers’ share, could not sufficiently buy the same amount of
155
cattle for the replacement stock. As a result, the number of cattle, income and capital
decreased over time. There was one small increase in farmers’ incomes and group capital
as a result of the increasing sales of culled breeding. Also, the farmers’ income decreased
slightly after 48 months of simulation. This reflects how farmers tended to increase their
share as the revenue from sales dropped far below their expectations. Within the based
simulation, after nine years all stock would have a zero value.
Figure 7.7 Base condition of the model running 120 months simulations
To test whether the model have been able to rigorously mimic the reality, the extreme
condition were applied. For this purposes, four extremes values were applied; calving
rate, share for farmers, purchase price, and selling price. Details of the values presented
in Table 7.4.
Table 7.4 Extreme values for simulations
No Variable Base value Minimum Maximum Unit
1 Calving rate 0.5 0.1 1 1/year
2 Share for
farmers
10 1 50 %
3 Purchase price 6.5 3.25 13 Rp/cattle
4 Selling price 8.25 4.125 16.5 Rp/cattle
Then, using these extreme values, the model was run to simulate the dynamics of the
selected four stocks (breeding, fattening, farmers’ income, and group capital) for the period
of 120 months, with the results being presented in Figures 7.8 – 7.13.
1:17 PM Wed, 2 Apr 2014
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Figure 7.8 Low extreme calving rate
Starting with the calving rate, Figure 7.8 and 7.9 show the behaviour under low and high
calving rates. Both results were as predicted. Low calving rate provoke farmers to directly
cull their cows, as a result, the breeding population vanished. The only remaining cows in
the first 10 month (less than 3 cows) were there because the model was equipped with the
order that the breeding portion should be maintained for at least 10 months. Revenue
from breeding sales was used to buy more fattening cattle, thus increasing the fattening
population during year 1.
Higher calving rate means more newborn calves per year; thus an increase in the
population. Moreover, with a high calving rate, farmers had more interest in maintaining
their breeding cattle. Consequently, more fattened cattle were also available, thus more
were sold resulting in increased revenue.. Figure 7.9 describes how the calving interval of
1 (1/year) results in an increase and maintenance of the group capital, farmers’ income,
and the breeding and fattening population over time. It has the potential to be increased
further, but the population was limited by the forage carrying capacity. These outputs were
consistent with the logic of the base model.
1:27 PM Wed, 2 Apr 2014
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Figure 7.9 High extreme calving rate
Figure 7.10 Low extreme share for farmers
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Figure 7.11 High extreme share for farmers
The model was then run using the extreme condition of the share for farmers. Ten percent
of the sales revenue was allocated for farmers’ shares and the remaining 90% was
allocated for the group to cover costs for purchasing replacement cattle and other group
expenses. Under a low extreme condition, the model is able to perform a rational
simulation. As shown in Figure 7.10, fewer shares went to the farmers which meant more
shares were available for the group. This would result in the maintenance of farming for a
longer period compared with the current base condition. However, over the first 48
months, farmers’ incomes were lower than the base. More of the group shares can
therefore be used to buy more cattle, thus the population is higher than the base before it
decreases due to the selling price dropping as a result of the import policy after month 48.
In contrast, high extreme share allocation to farmers will mean that most of the sales
revenue went to the farmers’ household and less was allocated for reinvestment in the
farm.
Lastly, the model was run using the price extreme, both for purchasing and selling price.
For purchasing price, the lower extreme occurs when the purchasing price was set to be
halved from Rp6.5 million to Rp3.25 million/animal. In contrast the extreme high use
assumption was that the price was doubled to Rp13 million/animal.
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Figure 7.12 Low purchasing price
Figure 7.12 showed that except for breeding, all stocks were sustained. With lower
purchasing prices, farmers managed to yield more profit. This is shown by the increase in
farmers’ incomes, the number of fattened cattle and the group capital over time. After 72
months, the system was in equilibrium. Although the group capital was sufficient to buy
more cattle, the carrying capacity of maximum 44 cattle meant that the cattle population
peaked. In contrast, Figure 7.13 shows that when the model is exposed to a high
purchasing price, farmers failed to obtain profit and suffered significant losses. As a result
all stocks decline significantly and essentially vanish after year four when no capital is left
to purchase cattle. These results indicate that the model used is able to mimic the real
condition.
Figure 7.13 High purchasing price
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The low selling price was simulated using half of the current selling price. Subsequently,
the high selling price is double of the current price. Figure 7.14 displays how the stock
behaves when the selling price is halved. Beef farming would be non-existent after the
fourth year. However, when the selling price is doubled farming would be sustainable
(Figure 7.15) although the breeder numbers would continue to fall due to the low calving
rate. Similar to the case of low purchasing price, the population will be constrained by the
carrying capacity.
Figure 7.14 Low selling price
Figure 7.15 High selling price
The next extreme situation is the combination of the selling and purchasing prices. Firstly,
the model was run using low selling and purchasing price. Purchasing price was halved to
Rp3.250 million, whereas the selling price was Rp4.125 million per cattle. The difference
1:47 PM Wed, 2 Apr 2014
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between the selling price and the purchase price is Rp875 thousand; far less than of Rp2
million used in the initial basic simulation. The output of the model (Figure 7.16) shows
that with a low margin, all stocks decrease.
When the model used a combination of high selling and purchasing prices, the output
showed that all stocks increased. Figure 7.17 shows the model output when the selling
and purchasing price doubled to Rp13 million and Rp16.5 million respectively. Thus, the
margin between purchasing and selling increased from Rp2 million to Rp3.5 million.
Based on the ability of the model to simulate the situations under the different extreme
conditions used, this researcher believes that the model has a sound structure and is
without any major structural errors. However, to support this argument, as mentioned in
the beginning of this chapter, another test needs to be performed which is called pattern
prediction test (Barlas 1989, 1996) or behaviour reproduction test (Schwaninger &
Groesser 2009).
Figure 7.16 Low purchasing and selling price
1:25 PM Mon, 5 May 2014
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Figure 7.17 High purchasing and selling price
Pattern Prediction Test
This test is designed to compare the behaviour of the model to its real situation (Barlas
1989, 1996; Schwaninger & Groesser 2009). Most of system dynamic data are neither
normally distributed nor independent, thus standard statistical analysis could not be
applied (Barlas, 1989). Instead, a multi-step behaviour pattern test was adopted. The
multi-step test is comprised of 6 consecutive steps; trend comparison and removal,
comparing the periods, comparing the means, comparing the variations, testing the phase
lags, and an overall summary measure (Barlas 1989, 1996).
Due to the limitation of the time series data availability, the pattern prediction test was
conducted based on 2 sets of data; (i) number of cattle available for breeding and (ii) the
number available for fattening. This data is available from the beginning of the project in
2008 and is presented in Table 7.5.
Table 7.5 Number of cattle for fattening and breeding 2008 – 2012
Year Number of fattening cattle Number of breeding cattle
Observed Simulation Observed Simulation
2008 23 23 12 12
2009 23 23 12 11
2010 23 23 5 3
2011 22 23 1 1
2012 20 20 0 0
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Figure 7.18 Number of cattle for fattening 2008 - 2012
Figure 7.19 Number of cattle for breeding 2008 – 2012
First, the datasets were compared to observe its trend lines. Figures 7.18 and 7.19 show
that the trend lines of the fattening and breeding data of the simulation model were able to
produce a similar trend to the real situation. Then, based on the same data, an
autocorrelation function test for period comparison (Barlas 1989) was conducted to
compare the autocorrelations of the observed and model-generated behaviour patterns.
23 23 23
22
20
23 23 23 23
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18.5
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2008 2009 2010 2011 2012
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2008 2009 2010 2011 2012
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164
As a result, the autocorrelations, means and variations from both datasets showed similar
autocorrelations between the observed and model-generated behaviour patterns. Finally,
the discrepancy coefficient which is a summarizing tool for the overall pattern prediction
test, showed that the model has a discrepancy coefficient of 0.25 and 0.26 for breeding
and fattening data respectively. This is a good result. For reference, this coefficient has
the value which lies between 0 for best prediction and 1 for worst prediction. Details of the
Barlas multi-stage test computation is presented in the Appendix 2. As the model has
passed all of the necessary tests, it can be stated that the model is valid and can be used
as the basis for scenario simulation.
7.2 Scenario Simulation
Figure 7.7 above provided an insight into the trend of the cattle population and the revenue
generated from beef farming over time. Nearly two years after the group received the
grant, its performance started to decline. Further, the model predictions based on the
existing situation were that beef farming will be non-existent in less than 10 years.
Therefore, an intervention strategy should be formulated to improve the cattle population
and the farmers’ incomes.
A set of simulations is required to examine whether the defined strategy is the right
strategy. This section will mainly explain which strategy should be used and how this
selected strategy would likely affect the system behaviour. The selected strategy should
be able to at least sustain the population and secure farmers income long-term.
Earlier, Section 6.5 discussed some of the key leverage points of the systems; these were
derived from identified archetypes. These included: increased forage availability, control
of beef trading, increased farm productivity, improvement of waste management, and
balance between breeding and fattening activity. Then, to obtain more rigorous
information about how the proposed intervention contribute to the pursuing of the system
purpose over time, a set of simulations is required. The simulations will predict the how
the dynamics of the stock if the strategy is implemented now. Then it predicts the changes
from 72nd month forward. Finally there will be discussion based on each archetype.
165
7.2.1 Increase Forages Availability
With the 0.3 Ha of forage area, 22 labourers are able to collect 30 kg of forage per day and
25 kg of fresh forage is consumed per animal, therefore the current carrying capacity
model was able to support 44 cattle. Thus, with the animal population less than the
carrying capacity, at this stage there is no need to expand the forages cultivation area.
This will become a concern when the total animal population exceed the maximum
carrying capacity.
7.2.2 Control the Trading
Currently, the group is only focused on fattening. However, the number of cattle
purchased is less than the number of cattle sold which resulted in a decrease in the cattle
population over time. The model also showed that the population decreased over the 10
years of simulation. The instruments to control the purchasing and sale of cattle are shares
for farmers and proportion used for purchasing cattle. An initial strategy to control the
cattle trading is to increase the proportion of group capital allocated to purchase cattle
which is currently at 90%. For this purpose, three different levels of group capital
allocation for purchasing cattle were simulated at the levels of 90, 92.5 and 95% as
scenario 1, 2 and 3, respectively. Consequently, as capital would be allocated to purchase
more cattle, the farmers’ bonus should be removed. Its effect on the number of fattening
cattle and the farmers’ income is presented in Figure 7.20. This simulation showed that
with an allocation of up to 95% of the group capital slowed the rate of population decrease
without reducing the farmers’ income when compared to the current situation. However,
there was still a decrease in the cattle population.
Another way to increase purchasing is by decreasing the proportion of shares for farmers.
A reduction in the farmers’ shares should increase the group capital and thus increase the
funds available for cattle purchasing. Another three scenarios were simulated; shares for
farmers were set at 10; 7.5 and 5% (scenarios 1, 2 and 3, respectively). The number of
fattening cattle and farmers’ income over time for these scenarios is presented in Figure
7.21. The simulation showed that reducing the share to farmers will lead to a slight
increase in the cattle population. However, it also reduces income over the first 48 months
of its implementation before it catches up with the base scenario.
166
Figure 7.20 Number of fattening cattle (a) and farmers income (b) on varied purchasing level
11:31 AM Mon, 12 May 2014
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Figure 7.21 Number of fattening cattle (a) and farmers income (b) on varied share for farmers level
7.2.3 Increase Farm Productivity
For fattening purposes, farm productivity could be assessed by looking at average daily
gain (ADG: kg/day) whereas breeding is assessed by calving rate (CR; %). Data collected
by the graduate showed that on average, the ADG is 0.3 kg/day. Cattle were fed forages
and additional supplements, which mostly was 0.8 kg of rice bran per animal per day.
Currently the rice bran price ranged from Rp1,600 – 1,800 per kg. To increase ADG the
farmers will need to add more supplement which means higher costs.
The commercial fattening unit of the experimental farm at the University of Jenderal
Soedirman could be used as a point of reference to estimate how much the feed costs
would increase as a consequence of increasing the ADG target. The Head of the
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168
experimental farm mentioned that the farm adopted the feed formulation of Bata (2007)
study. Bata (2007) reported that if cattle are fed 40% ammoniated rice straw and 60%
concentrate, at 3% of body weight on dry matter basis then an ADG of 1 kg could be
achieved. Assuming an average body weight of 280 kg, then 6.5 kg of concentrate and 5
kg of dry ammoniated rice straw per animal per day would be required. Currently, the
concentrate price is Rp2,500 per kg. Based on the ADG and the feed cost, the income
over feed cost (IOFC) for this improved feeding strategy is Rp8,750 per cattle per day,
44% higher than using the current feed at Rp6,060 per cattle per day. The concentrate
composition and IOFC calculation are presented in Appendix 6.
So, for the modelling purposes, an ADG of 1 kg would be achieved when using 6.5 kg of
concentrate at Rp2,500 per kg. Thus, the cost of feed will increase to Rp16,150 per
animal per day. In contrast an ADG of 0.3 kg will be achieved under the current feed.
Additional converters were then added into the model, including 1 dimensionless multiplier
“effect of concentrate on ADG” which represents the average daily gain that would be
achieved with varied concentrate levels. The dynamic model with ADG and additional
feed concentrate is presented in Appendix 3. This model was then used to simulate the
change in the number of fattening cattle and farmers’ income under two scenarios; an
ADG 0.3 kg/day and an ADG of 1 kg/day.
Figure 7.22 (A) shows that an ADG of 1 kg would increase the cattle population and
income over time. Further, if an ADG 1 kg was obtained, the farming would be
sustainable. Model simulations also showed that additional feed costs can be covered
from the gained weight as shown in Figure 7.22 (B).
Increasing the gap between purchasing and selling price would also yield more farm
income. Currently, the price is determined mainly by traders based on the physical
appearance of the animal. Traders have more skill in estimating body weight, and thus
have an advantage over the farmer when discussing price. Moreover, cash transactions
often tempt farmers to sell at a cheaper price.
169
Figure 7.22 Number of fattening cattle (a) and farmers income (b) on varied ADG level
So, what would be the outcome if the farmers’ animal assessment skills were to increase?
Figure 7.23 shows how the fattening population and the farmers’ income will change if
animal assessment skills improve. For this simulation, it is assumed that all pricing was
based on the body weight. Increasing assessment skills will improve the accuracy of
weight prediction, thus reducing the risk of overpriced purchasing and under-priced selling.
However, it will take years to increase this skill. Purchasing a cattle weighing scale will be
an easier solution. Currently, one unit in Indonesia is priced at approximately Rp8.5
million. Two simulation scenarios were used to determine the outcome of improved animal
assessment. Scenario 1 is the basic current animal assessment skill, i.e. not assessing
live weight well (score 3) without investment in a weigh scale. Scenario 2 is the improved
8:51 AM Thu, 3 Jul 2014
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Scenario 1: current feed with 0.5 kg ADG Scenario 2: 6.5 kg additional concentrate with 1 kg ADG
170
assessment using a weigh scale. Thus the ability to predict weight is 100% accurate
(score 5). Initially, investment in a weigh scale will reduce the capital available for
purchasing replacement cattle; as shown by a decline in the fattening population right after
month 72 (Figure 7.23 A). However, with the increased accuracy to measure body weight
farmers are likely to have a cheaper purchase price and a better selling price. This
improvement in income earned is shown in Figure 7.23 B.
Figure 7.23 Number of fattening cattle (a) and farmers income (b) with and without investment on scale
Moreover, characteristics of market demand should also be taken into consideration when
starting a fattening program. There are two main events that lead to an increase in the
cattle price: Idul Fitri and Idul Adha. Both demand different cattle characteristics. For Idul
Fitri, appearance is neglected, as the main interest is the body weight. In contrast for Idul
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Scenario 1: current animal assessment skill Scenario 2: invest on scale
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Adha, appearance is the most important aspect. In Java white cattle (Ongole) are the
preferred animal.
Currently most farmers still look for a ‘good looking’ animal when they purchase cattle.
This practice will only be suitable for the Idul Adha situation. Thus, for other purposes
body weight should be used rather than appearance. A weigh scale is one instrument that
can be used to overcome the lack of animal assessment skills in terms of predicting the
body weight. Other skill such as choosing which cattle is the most likely to gain more
weight or what characteristics should be examined when purchasing cattle are some of the
skills which should be mastered by farmers or at least by one member of the farmers
group.
Another indicator of productivity is calving rate (CR). Many factors contributed to
reproductive performance; these include genetics, management factors (Mukasa-Mugerwa
1989; Burns et al. 2010) and diet (Butler 2000; Sullivan et al. 2009). However, currently
the farmer group studied did not have any breeding cows, because they have shifted all
animals into a fattening program. Thus, simulation based on a scenario to improve the
calving rate cannot be rendered.
To provide insight of the dynamic of the population and farmers income which likely to
occur, the model was run using two scenarios of CR; 0.5, and 0.8 (these values mean
50% and 80% calving respectively). The 80% value was used with additional production
costs based on assumptions by the Research and Development Unit of the Directorate
General of Livestock Services which stated that to obtain CR of 0.8 per cattle per year
quality feed which cost around Rp4,000 per cattle per day is required (Mariyono & Romjali
2007). So, the first scenario is based on the current feeding system with 0.5 CR, and
second scenario is based on an improved feeding system to obtain 0.8 CR. This
assumption was then simulated into the model and rendered from the start of the farming
to provide a description on an “if” based conditions.
Figure 7.24 presents the predictions of the model for the breeding and fattening population
as well as farmer’s income if the improved feed scenario (shown by red line) was applied.
Increased CR would allow farmers to keep their breeding cows, thus producing more
calves for fattening.
172
Figure 7.24 Number of fattening (A), farmers’ income (B), and number of breeding (C) with and without improved feed for breeding cows
Apparently, additional cost for feed could be covered from the additional revenue of cattle
sales. The fluctuation in breeding population (Figure 7.24.C) was caused by the import
policy. As discussed earlier in Chapter 6, without imports fewer cows would be
slaughtered to meet the beef demand. In general, although improved feeding incurs
additional costs it would be able to sustain the farming in terms of population and income.
population provides opportunities for farmers to allocate more cows to breeding
purposes. However, as the population increases, so does their forage
consumption. Less forage suppresses population.
Limit to growth
(Figure 6.18)
2 Breeding produces calves thus increases the cattle population which further
reinforces breeding. However, farmers need to sell their cattle in order to earn
income which limits growth.
Limit to growth
(Figure 6.19)
3 As household necessity increased, farmers tended to allocate a disproportionate
share to their household expenses. This brought consequences of decreasing
the share of income allocated back to farm inputs.
Shifting the
burden
(Figure 6.20)
4 As cattle population need to be increased, the government introduces the SMD
program that required farmers to purchase cows. However, large amounts of
cash inflow from the government program provoked farmers’ expectation to gain
immediate benefit from the program. Thus, farmers shifted to fattening which
has a shorter production period. This situation further suppressed breeding
success.
Shifting the
burden
(Figure 6.21)
5 Households living close to the cattle housing received a pollution compensation
fee from the group. However, as the cattle population increases, the potential for
conflict will also increase, and this fee may need to be increased, with flow-on
effects on reducing cash available for other activities including farmer skills
training, for example in waste processing.
Shifting the
burden
(Figure 6.22)
6 Farmers increasingly prefer fattening instead of breeding. Consequently, more
resources are allocated to fattening purposes and fewer to breeding, resulting in
more cash generated from fattening, and fewer calves produced from breeding.
If this continues, the breeding activity will cease, and the group will become fully
dependent on external sources for replacement cattle.
Success to
successful
(Figure 6.23)
7 The SMD program was designed to increase the cattle population and farmers’
income, thereby becoming less dependent on aid programs. However, the
suddenly increased cash inflow had the unintended result of provoking farmers to
increase the share of income allocated to household. Consequently, farmers’
power to buy more cattle decreased, and their dependency on the aid program to
sustain their farming activity increased.
Fixes that fail
(Figure 6.24)
RQ 3. How can beef farming productivity in rural Java be improved to enhance
smallholder livelihoods?
The answers to this final RQ were initiated in Section 6.5, with a discussion of the leverage
points of each archetype, from which several scenarios of intervention were developed.
These scenarios were simulated (recall Section 7.2) to explore ways of improving
smallholder beef farming. The summary of the proposed strategy is presented in Table
8.3 in terms of the thesis question RQ3.
193
Table 8.3 Summary of the strategy
No Archetypes Leverage Strategies
1 Limit to growth; forage availability
Increase forages availability
Planting high quality grass in the near-by forest margins and river, applying feed preservation technologies, exchanging compost for cattle feed, and/or allocating profit to feed purchases (Currently, forage availability is not an issue as the cattle population is less than the carrying capacity)
2 Limit to growth; number of sales
Control the trading
As reducing the number of cattle sold will lead to decreased farmers’ actual income, increase the desired sales rate and encourage farmer to sell more cattle (B3 loop); thus, provide education about herd replacement strategies to maintain the desired sales rate in a sustainable level is preferred. Simulation showed that with an allocation of up to 95% of the group capital to purchase cattle replacement, slowed the rate of population decrease without reducing the farmers’ income.
3 Shifting the burden; demand for income
Improving farming productivity to generate income
Improve the feed. Simulation showed that for fattening, an application of 6.5 kg of concentrate at Rp2,500 per kg increased cattle population and income over time. For breeding, maintaining the quality of a cow requires proper feeding which likely more costly. Model confirmed that if the calving rate could reach 80%, even with improved feed cost, the cattle population and income will be sustained. Reducing the risk of overpriced purchasing and under-priced selling by avoiding the farmers’ tendency to select “pretty” rather than “lean-but-healthy” when they purchase cattle for fattening, and evading cash transaction because farmers often agree to sell their cattle once they “feel” the cash in their hand. Provide education about whole-farm budgeting to help farmers control their allocation of income to farming versus household expenditures, seen as share for farmers in the CLD. Farmers’ skill in whole farm budgeting would help them to reasonably allocate resources and set a sensible earning target for each activity.
4 Shifting the burden; need to increase cattle population
Strengthening breeding performance
Educating farmers on animal assessment to select a good breeding cow is one strategy to improve the ability to select quality cows thus reinforcing the R2 loop as the engine of growth of the cattle population. Currently, selecting the breeding cow is merely based on its appearance.
5 Shifting the burden; pollution problem
Strengthening waste management skill
Composting is an applicable strategy on waste management. Although model simulation (Figure 7.25) suggests that selling of compost would give a small financial contribution to the group, it minimized conflict.
6 Success to successful; breeding and fattening
Balancing the breeding and fattening
Educating farmers on farm planning and budgeting to balance the resource allocation between breeding and fattening. Model simulation (Figure 7.26) showed that even with 16.5% proportion of breeding (half of the program target), the population and farmers’ income sustained.
7 Fixes that fails; grant to increase population
Focusing on increasing population
Buying cattle using subsidized agricultural credit (Sjah, 2005) instead of grant.
194
8.2 Implications and Recommendations
There are three research implications of this study: implications for knowledge, for
practice, and for policy.
8.2.1 Implications for Knowledge
As discussed in Sections 3.6 and 3.7, this study offers the combination of three systems
thinking methodologies; System Dynamics (SD), Soft Systems Methodology (SSM), and
Critical Systems Heuristics (CSH). Although subject to criticism of its lack of grounding
theory (Bowers 2011), the use of a combination of several methodologies has been widely
practised (Howick & Ackermann 2011) to overcome the weaknesses of individual methods
(Midgley 1997b). The reasons for selecting these three methodologies were based on the
objectives of the study and the characteristics of the object of this study, the smallholders.
Aligned with the objective of this study to formulate strategies to improve the beef farming,
SD was then preferred as the main methodology for its ability to produce a rigorous
dynamic model (Jackson 2002).
The first stage of the SD is the problem structuring process. When dealing with a system
which has multiple stakeholders such as smallholders’, SD was not sufficiently equipped
with a tool to elaborate the varied stakeholders’ perspectives. This is where SSM, which is
sensitive to multiple stakeholders’ perspectives (Rodríguez-Ulloa et al. 2011),
complements the SD. The two main tools of SSM, the Rich Picture and the CATWOE
analysis, were able to assist the researcher and the participants to identify the actors
involved in the system, their roles, and the connections among actors. However, the
outcome was limited on visualizing the everyday situation and was not sufficiently
descriptive of the problematic situation of the farming. This was caused by the difficulties
to investigate the current problematic situation. Farmers considered that their everyday
farming activities were normal. Therefore, to further study the problematic situation of the
farming, the 12 boundary questions of CSH were applied. Evidently, contrasting the
dreamed ideal to the current real-world situations (see Table 6.2) was able to help farmers
and researcher to identify the problematic situation of the farming (see Figure 6.4) from
which the CLD and the dynamic model were developed.
A combination of SD and SSM has been practiced by Rodriguez-Ulloa and Paucar-
Caceres when they introduced the Soft Systems Dynamic Methodology (SSDM)
195
(Rodriguez-Ulloa & Paucar-Caceres 2005) to study the problem of citizen insecurity in an
Argentinean Province. The SSDM complements SSM with SD methodology. It was
developed based on the seven steps of SSM (see Figure 3.5) which then enriched with SD
in the process of identifying the problem and generating the strategies. In total, SSDM
comprises of a complex 10 steps process which requires its practitioners to think in three
different world; the real world, the problem-oriented system thinking world, and the solving-
oriented system thinking world (see Figure 3.6). Although the SSDM would be able to
produce a comprehensive understanding of the systems, it requires a lengthy process
which might be difficult to be adopted by practitioners, particularly those who have limited
time and budget.
This study offered an alternative methodology for practitioners who intend to develop a
dynamic modelling of a system which has multiple stakeholders. Within a context of time
and budget constraints, the shorter five stages of SD offered in this study were more
applicable, than the 10 steps of SSDM. Consequently, the output of this methodology may
lack some of the rigour of those generated from SSDM. Unlike the SSDM, in this study the
dynamic model and the strategies were not discussed further with the participants. This
might imply researcher subjectivity and possibly incompatibility of the recommendations.
Nevertheless, although the model is not perfect, in the context of dynamic model, a good
model is the one that is able to serve its purpose (Sterman 2000; Maani & Cavana 2007).
Given the central questions posed for this study, the researcher is happy with the outcome
of rigorous investigation.
Another combination of systems thinking methodology was proposed by Duong (2010)
who combines the SSM and CSH to explore the role of participation in improving solid
waste management in peri-urban Vietnam. CSH has the tool, known as the 12 boundary
questions, to encourage the commonly-marginalized stakeholder to speak. Duong (2010)
claimed that the combination was practically useful in encouraging participation of a
diverse range of stakeholders. Although the combination of SSM and CSH in Duong
(2010) study was able help the researcher and the participants to increase the depth of
understanding of their research topic, i.e. solid waste management, it was not able to
generate a rigorous model which can be used to simulate intervention scenario.
To sum up, the enhanced SD offered in this study was suitable for practitioners who
propose to study a social system and generate a dynamic model of the system, but are
196
constrained by time and budget. The methodology was more complex than the original
SD methodology, but shorter than the SSDM. Moreover, the addition of CSH was able to
expand the ability of the methodology to grasp the real world situation and harness the
voice of the marginalized actors.
8.2.2 Implication for Practices
The study revealed that beef breeding is unattractive to smallholder farmers. There is a
significant tendency of the farmers to prefer fattening rather than breeding. Although the
SMD program has specifically mandated farmers to maintain breeding, farmers chose to
disregard it. This action indicates that farmers are very logical in seeking to maximise their
own short term welfare. They decided to grasp the opportunity to obtain a grant, but then
side tracked the intended program implementation. Thus, even though the model suggests
that maintaining breeding is required to sustain beef farming, farmers cannot be forced to
do breeding. Instead, ensuring the availability of quality cows for the program could be
recommended, as the main reason for the shift from breeding to feeding-fattening was the
poor reproductive performance of the cows. The calving rate is positively linked to
preference to breeding (Figure 6.17). Thus, improving the calving rate should restore
farmers’ interest in breeding.
Importing free range non-indigenous cows to perform in a hot and humid housing
environment should not be promoted to increase the availability of quality cows. The study
showed that the imported cows failed to adapt to the new environment, resulting in poor
reproductive performance. Promoting local breeds which are well adapted to the
smallholder farming environment (e.g. traditional housing and feeding) should be
preferred.
Success in breeding will secure the supply of the feeder cattle for smallholder beef farmers
to run their fattening operations. Importing of feeder cattle is not recommended as a policy
to ensure supply for a similar reason as for import of breeding cows. Smallholders’ limited
land area necessitated the farmers cut and carry feeding systems. The cattle were
housed all time and the feed were varied in term of its variety and quality. These
conditions are unsuitable for imported cattle which have previously experienced only free
range pastures. Thus, in relation to fattening, practices should be focussed on how to
197
develop a reliable supply chain of beef-fattening farming which includes the supply of
feeder cattle and feed.
In relation to fostering fairer trading conditions, another initiative for extension services to
develop is a campaign aimed at encouraging farmers to use mobile banking. This could be
proposed as another implication for practice, resulting from this study. Commonly, a
mobile banking unit is available in the livestock market, but not all farmers use it. Banking
should be endorsed instead of cash transactions, not only to ensure security, but also and
particularly to prevent undervalued selling because farmers tend to agree to sell their cattle
at below market value when offered immediate cash.
8.2.3 Implication for Policy
The roles of extension service officers and the university should be more clearly defined.
Training to improve farmers’ skills on animal assessment, feeding, and farm planning and
business management are among several skills which need to be improved. For future
funding, these training activities should be considered as part of the program.
Furthermore, the CLD showed that the leader’s power has a crucial role in ensuring the
allocation of group resources back to the farming activities (Figure 6.17). Therefore,
providing group leader training should be endorsed, particularly for ‘young’ (recently
formed’ groups and less experienced leaders. All these training activities should be
aimed at making farmers and groups more self-reliant and less dependent on external
assistance. The dynamic models developed in this study could be proposed as relevant
and powerful learning tools in such training to simulate how a beef farming sub-system
would likely behave over time under different resource allocation and production
assumptions.
Additionally, the study suggests that smallholders still need government support to
improve their performance. However, the program should not be considered to be
providing free money. The CLD shows that the government grant, unaccompanied by
repayment obligations, increases farmers’ expected income from beef farming which will
incite the B3 loop (Figure 6.7) – a vicious cycle to cattle population growth. Therefore, in
future, subsidized agricultural credit (Sjah 2005) would be preferable as an alternative
source of funding. However, the credit provision should be accompanied by careful
consideration of five aspects of credit management: the credit should be able to cover
198
proper breeding and fattening activity of a farmer group; farmers should clearly
understood that credit has to be repaid, and the conditions of such repayment; monitoring
standards should be strictly upheld regarding distribution, allocation and repayment of the
loans; repayment options should be flexible, including accepting of non-cash repayments;
and the clients skills and understanding of their responsibilities should be improved
through education and extension services (Sjah 2005).
With regard to import policy, the government should carefully consider the balance
between securing the national beef supply and maintaining the national beef population
growth. Figure 6.12 showed the sensitivity of the market to import policy. Imports affect
the smallholders in two ways: imports increases farmers’ preferences to fatten females as
a response to minimize risk, and imports decrease market prices, thus lessening sales
revenue.
Finally, since breeding is the key to increasing the cattle population, more comprehensive
policy on breeding herd development is required, such as establishing breeding farms or
breeding stations where farmers could buy reliable locally adapted breeding cows suitable
for intensive housing husbandry.
8.3 Limitations
All quantitative data required for the dynamic modelling process were obtained from one
farmer group as the case study. Thus, the model and the output may be fully valid only for
the conditions experienced by this group and should be used reservedly to make broader
generalizations. However, the framework and linkages of the model can be used as a
basis to develop other models by appropriate adjustments. Since the case study was
undertaken in a government supported farmer group, greater adjustments may be required
for non-supported groups.
All models are wrong (Sterman 2002), in that they are never completely correct (accurate),
and that is probably true for the model used in this thesis. This is simply because a model
will never really be able to represent the real situation. Several dimensionless multipliers
were soft variables which were developed from assumption and assessment, such as
effects of skills, or effects of calving rate on breeding proportion. These dimensionless
multipliers will shape the system behaviour yet are difficult to measure.
199
8.4 View for Further Research
Further research to explore the impact of being a grant recipient on farmer or farmer group
resilience would enrich the knowledge of whether aid really helps at all, or even makes the
situation worse in the long term. When farmers were asked about their farming
sustainability, re-applying for another grant appeared as the common answer, strongly
suggesting continued aid dependency.
The effect of arrival of cattle imports is to lower the price of live cattle in local markets
immediately. Even the news of cattle in transit will have a negative impact. Traders will
use the opportunity to suppress farmers’ price. However, this applied only to the price of
live cattle. Regardless of the import policy, the beef price for consumers remains relatively
constant. Further study on import policy is required to explore the effects of varying the
proportions and volumes of frozen beef versus live cattle.
8.5 Conclusion
The incorporation of the rich picture and the CATWOE analysis of SSM, and the 12
boundary questions of CSH enhanced the problem structuring stage of SD which is often
criticized for its subjectivity. The combination of techniques was able to embrace the
perspective of the multiple stakeholders involved, particularly the farmers who are often
reluctant to express their opinion. Accordingly, the generated causal loop diagram (Figure
6.17) and the dynamic model (Figure 7.27) were able to provide more holistic
understanding of the system than was provided by SD alone. The five steps of the
methodology (Figure 4.2) could be recommended for practitioners who intend to study
system which has multiple stakeholders and assumed to have a social power asymmetry
but constrained by limited time and budget.
The methodology enabled production of a rigorous dynamic model which can be used to
simulate intervention strategy effects. In this study, it provides a basis for further
development of smallholder beef farming systems. This includes several conclusions, as
follows.
1. The policy of imported breeding cows resulted in poor reproductive performance
resulting in failure to increase the cattle population. Promoting local breeds which
are well adapted to the smallholder farming environment should be preferred.
200
Success in breeding will help secure the supply of feeder cattle for the smallholder
beef farmers to run their fattening operations.
2. Farmers are logical. Although the SMD program specifically mandated farmers to
run breeding operations, farmers largely shifted into fattening which enabled them
to generate income faster to satisfy their household needs. Regardless of the
program conditions, farmers chose to grasp the opportunity to get a government
grant, and then side tracking the program along its implementation. Therefore,
studying farmers’ opinion when designing a program would be a worthy option for
the policy makers.
3. Smallholders still need government support. However, as the government grant
incites a vicious cycle to cattle population growth (B3 loop, Figure 6.7), the concept
of grants should be re-designed. Subsidized agricultural credit would be preferable
as an alternative source of funding.
201
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Appendix 1. Critiques of the actual situations of the smallholder beef farming system
Group Motivation critique
1 Beef farming for smallholders was an activity to generate additional income for the household. As fattening was considered to be more profitable, it was preferred rather than breeding. However, farmers realized that this practice will not sustainable in a long period because they will always dependent on the calves, heifers or feeders supply whose price was constantly unpredictable. The revenue was considered as the measure of success. Revenue was mainly regarded as the indicator because rarely farmers calculate costs incurred during the process Therefore maximizing revenue became the main concern. Regarding to the government aid, if it meant to improve farmers’ welfare, it should in a form of grant without any complex regulation.
2 Beef farming was an activity to breed and to raise cattle which in turn will generate income as well as increase the population. The government program (SMD) designed to help farmer groups to do both breeding and fattening. However, current practice which tends to prefer fattening and ignoring the breeding were not in line with the common goal to have a sustainable agriculture and sustainable income. Beside revenue, cattle population should also regarded as the indicator of success.
3 Beef farming aimed to raise cattle and generate income for the farmers. Also, to provide manure which essential to other agricultural activities such as cropping and fisheries. In turn, cattle used agricultural by product for their feed. To this purpose, farmers must keep and maintain their cattle because without cattle, their plant cropping and fish cultivation would also be impacted. In short term, fattening was preferable because it seems more potentially profitable but in long term it will not support the population growth and will inspire other farmer which currently do the breeding to shift into fattening. If more farmers were shifted into fattening, the national cattle population growth will be decelerated. Large amount of grant flowing to a group make farmer became increasingly rely on government aid program. The group assets should be regarded as the measure of success. This will include the cattle population as well as the income earned from sales. With the current farmer focus on revenue maximization, any “in-cash” expenses were mainly avoided to suppress cost.
Summary All participants agreed that farmers were the direct beneficiaries of the system. The disparity comes in the purpose of the farming. Government representatives argued that the farming should be focused on breeding to increase cattle population. Differently, farmers stated that the main purpose was to generate income for their household. Although farmers aware that in the long term will make them more dependent to the cattle supplier, fattening was largely preferred over breeding because fattening can generate income more quickly. Large capital from the government grant which instantly flows to the group brought an expectation that it would generate immediate additional income to the household. Consequently, the measure of success was also differs. Government regarded the population as the main indicator; farmers used the total sales revenue; whereas the program coordinator used group asset which combines population and revenue as the measure of success. As farmers were the main beneficiaries, minimizing expenses to reduce costs became the main concern although sometimes it sacrifices feed quality.
Control critique
1
To achieve the purpose, the farmer groups have financial support from the government program. However, it was mostly allocated to buy cattle. Although forages plantation area was very limited, grasses were available at the riverbank or forest margin nearby. Therefore, with less than 3 cattle per person, feed was not an issue. Additionally, rice straws as an alternative feed were available abundantly throughout the year which can be preserved using ammonization. Manure, as the main by product was sold without any processing although composting might increase its value. Group leader and program coordinator have the power to allocate group capital and resources. Experience with the breeding from the program, it is difficult to select cow which will be good for breeding purposes. Also, there were some externalities related to the farming but relatively uncontrollable such as price uncertainty, consumer preference, and political movement. Some politically related farmer groups will be more likely awarded with the grant. Also, import policy decrease cattle price significantly.
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2 Financially, capitals of the farmer group were mainly supplied from government aid program. Therefore, farmers become more reliant on aid program to improve their farming. However, farmer group rarely communicate with the local government representative when using the fund. Group leader and program coordinator have the power to manage group resources. But, in term of feeding; forages and rice straw were not sufficient to support fattening. With the current forages cultivation area, it will not able to support population growth. Related to breeding, lack of recording resulted in difficulties to predict reproductive performance of a cow. Concentrate as additional feed are necessary to yield optimum weight gain. But how to provide this concentrate with minimum expenses?
3 Government program and subsidized bank credit were two major financial supports for farmer group. In order to be more sustainable, farmers should shift their dependence for aid program to subsidized credit because the credit will encourage the sense of responsible which in turn will make farmers stronger, also there will be no guarantee that the government will continue to provide aid program. Currently, group leader and coordinator have more room to manage the assets. This was to make sure that all assets secured. Price volatility, cattle import, and political movement are externalities which uncontrollable. Although sometime discouraging, it will be better to focus on the controllable resources.
Summary The group resources were mostly managed by the group leader. Although it sounds coercive, this was to ensure that all resources were managed effectively and securely because major capital asset of the groups came from the grant which led to less of sense of ownership. Overpriced feeding or under nutritious feeding commonly occurred. Farmers rarely communicated with the nutritionist from the near-by university to discuss feed formulation because they were reluctant to go to the university. Although political issues are often discouraging, all participants agreed that this was beyond their power and it would be better to focus on the controllable resources. However, it was proven that import policy indeed decrease selling price.
Knowledge critique
1 The group leader and the graduate were the only expertise provider. The main concern in this area was skill in feeding formulation. This was due to the price volatility of the feed. Currently, farmers used only one recommended formulation. More sets of formulation were required to give options to select the most economic ration. Farmers believed the group leader for their experience. However, the university should be more active to assist farmers to provide more update information or innovation. The group leader acknowledges that they sometimes act coercive. This aimed to maintain discipline.
2 The group leader was considered as the expert. Commonly, all decision comes from the group leader. Most members obediently followed their leader due to their experiences in managing group. Feeding and marketing were two major critique of the current situation. The university, as the source of information and innovation, was rarely communicated with the farmer related to feed formulation and other farming skills. For marketing purposes, it should be formulated the solution to create a better access to market with a better pricing policy.
3 The group leader and the Graduate were acted as the expert in the group. Therefore their skills need to be continuously upgraded. Trust from the member to their leader was a good capital which should be maintained. What would be the best way to upgrade their skills?
Summary Farmers only trust the group leader and peer farmers as the source of knowledge and skills. Although the university and the livestock service office are always welcoming farmers, many feel reluctant or uncomfortable to enter the campus or government office. Farmers have issue on feeding formulation. Problems have also occurred in marketing. Farmers were greatly dependent on local traders to buy and sell cattle. Cattle price is determined by its physical appearance instead of its body weight. Also, farmers have difficulties to identify a quality cows in the market because breeding record was commonly unavailable.
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Legitimacy, critique
1 Among those negatively affected were the household live close to the cattle housing. So far, there were not any complaints because of the coerciveness of the group leader. Also, every year they received cash and in-kind compensation from the group.
2 The affected were including the surrounding farmer, as well as non-group member farmer and farmer group which did not received any government grant. There were no rooms for those affected to express their interest for the moment.
3 Surrounding household, individual farmer and non-awarded group were among those affected but not involved. Their interest was hardly heard. The power of the group leader was still the major obstacle for the affected to directly confront with the group.
Summary Surrounding households, individual farmers and non-participants group were among those affected but not involved. There was no forum or media for the affected to express their interest.
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Apendix 2. Barlas multi-step validation procedure
Fattening population
year observed model
generated
1 23 23
2 23 23
3 23 23
4 22 23
5 20 20
Autocovariance Cov (k) 0.004 -0.144
Autocorrelation r (k) 0.475 0.9
Var (r(k)) 0.008421053 -0.16
Difference d -0.168421053 Se (d) 0.099954192 E1 -0.004115226 E2 0.173240983 C 2.359632345 U 0.255408545
Breeding population
year observed model
generated
1 12 12
2 12 11
3 5 3
4 1 1
5 0 0
Autocovariance Cov (k) -1 -0.926481152
Autocorrelation r (k) -0.347826087 -0.27254794
Var (r(k)) 1.292750424 1.355519028
Difference d 0.075278147 Se (d) 1.627350439 E1 -0.056581818 E2 0.042771034 C
U 0.249586604
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Appendix 3. Model Equations
224
225
226
Appendix 4. Model with price gain
group capital
group rev enue
group expenses
selling price
f armers rev enue f rom sales
selling price modified by import
purchase price modified
by animal judging skills
cattle able to be purchased
proportion f or purchasing cattle
proportion of non
purchasing expenses
allocated f armer rev enue
f und av ailable f or cattle
share f or f armers
lif espan
breeding
share f or f armers
modif ied by rev enue
proportion of non
purchasing expensessales rev enue
actual breeding portion
non cattle expenses
ef f ect of rev enue on
share f or f armers
~
cattle purchased
calv ing
rearing
f attening rate
purchasing
normal breeding f raction
breeding f raction
modif ied by calv ing
ef f ect of calv ing rate
on breeding f raction
~
ef f ect of rev enue on leader
power to share rev enue
~
expected calv ing rate
selling
expected f armers rev enue
share f or f armers modif ied
by rev enue and leader power
target rev enue
f armers capacity
to collect f orages
fattening
number of labour
f orage production
f orage consumption per cattle
f orages area
max f orages
productiv ity
collected f orrages
breeding purchase
culling
ADG
f armers income
modif ied carry ing capacity
f armers rev enue
expected ability to
select quality cows
actual ability to
select quality cows
ef f ect of ability to select
quality cows on calv ing rate
~
breeding f raction modif ied
by calv ing rate and import
current calv ing rate
expenses
import
ef f ect of f eeding skills
to carry ing capacity
~
actual f eeding skills
expected f eeding skills
selling price modif ied by import
max cattle purchased
actual carry ing capacity
actual purchasing expenses
max cattle purchased
actual animal judging skills
expected animal judging skills
ef f ect of animal judging
skills on purchasing price
~
ef f ect of animal judging
skills on selling price
~
selling price modif ied by import
and animal judging skills
purchase price modif ied
by animal judging skills
normal purchase price
compensation f ee
expenses f or compensation
breeding
expenses for compensation
weight gain
calv ing rate modif ied
by recording
import policy
expenses rate
f attening
f attening time
price decreased under import
price per kg
selling
selling price modified by import
and animal judging skills
price gain
concentrate lev el
fattening
f armers' bonus
non cattle expenses
growingcalv es
growing time
actual cattle purchased
breeding
calves
ef f ect of calv ing rate
on breeding lif espan
~
concentrate
modif ied breeding lif espan
modified breeding lifespan
actual breeding portion
concentrate cost
concentrate price
purchase price modified
by animal judging skills
net f und av ailable
concentrate cost
expected concentrate lev el
ef f ect of concentrate on DG
~
target ADG
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Appendix 5. Model with composting
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Appendix 6. Income over feed cost calculation
Current Feed
Rice bran price (Rp/kg) 1,800
Daily gain (kg/day) 0.3
Cattle price (Rp/kg) 25,000
Feed per day (kg/day) 0.8
IOFC = cattle price * ADG - daily feed cost
IOFC (Rp/day) 6060
Improved Feed
Feedstuffs
Proportion (%)
rice bran 32
fresh cassava waste 25
soybean cake waste 21
coconut meal 21
mineral mix 2
Feed price (Rp/kg)
2,500
Daily gain (kg/day) 1
Cattle price (Rp/kg) 25,000
Feed per day (kg/day) 6.5
IOFC = cattle price * ADG - daily feed cost
IOFC (Rp/day)
8,750
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Appendix 7. Gross Margin Analysis
Crop farming
Area 1 Area 2 Area 3 Area 4
Total Batch 1 2 3 1 2 3 1 2 3 1 3 3
Commodity Rice Sticky Rice Rice Rice
Sticky rice Rice
Sticky rice Rice
Sticky rice Rice
Sticky rice Peanut
Land area (Ha) 0.35 0.35 0.35 0.53 0.26 0.53 0.175 0.175 0.175 0.35 0.35 0.35 1.395